Question : 34) Nicholas Company manufacturers TVs. Some of the company’s data : 1217253

 

34) Nicholas Company manufacturers TVs. Some of the company’s data was misplaced. Use the following information to replace the lost data:

 

Analysis

Actual

Results

Flexible Variances

Flexible Budget

Sales-

Volume Variances

Static Budget

Units Sold

112,500

 

112,500

 

103,125

Revenues

$42,080

$1,000 F

(A)

$1,400 U

(B)

Variable Costs

(C)

$200 U

$15,860

$2,340 F

$18,200

Fixed Costs

$8,280

$860 F

$9,140

 

$9,140

Operating Income

$17,740

(D)

$16,080

(E)

$15,140

 

Required:

a.What are the respective flexible-budget revenues (A)?

b.What are the static-budget revenues (B)?

c.What are the actual variable costs (C)?

d.What is the total flexible-budget variance (D)?

e.What is the total sales-volume variance (E)?

f.What is the total static-budget variance?

Objective 7.3

 

Answer the following questions using the information below:

 

The actual information pertains to the month of September. As part of the budgeting process, Kriger Fencing Company developed the following static budget for September. Kriger is in the process of preparing the flexible budget and understanding the results.

 

ActualFlexibleStatic

ResultsBudgetBudget

Sales volume (in units)10,000     12,500

 

Sales revenues$500,000$$625,000

Variable costs256,000$ ________300,000

 

Contribution margin244,000$325,000

 

Fixed costs229,000$ ________225,000

Operating profit$ 15,000$      $ 100,000

 

1) The primary reason for low operating profits was:

A) the variable-cost variance

B) increased fixed costs

C) a poor management accounting system

D) lower sales volume than planned

Answer the following questions using the information below:

 

The actual information pertains to the third quarter. As part of the budgeting process, the Duck Decoy Department of Wooden Figurines Incorporated had developed the following static budget for the third quarter. Duck Decoy is in the process of preparing the flexible budget and understanding the results.

 

ActualFlexibleStatic

ResultsBudgetBudget

Sales volume (in units)13,000     12,000

 

Sales revenues$257,500$$250,000

Variable costs154,000$ ________175,000

 

Contribution margin103,500$75,000

 

Fixed costs50,500$ ________49,500

Operating profit$ 53,000$      $ 25,500

 

2) The flexible budget will report ________ for variable costs.

A) $154,000

B) $189,583

C) $175,000

D) $13,583

 

3) The flexible budget will report ________ for the fixed costs.

A) $50,500

B) $49,500 Favorable

C) $49,500

D) $1,000 Unfavorable

4) The flexible-budget variance for variable costs is:

A) $21,000 favorable

B) $13,583 unfavorable

C) $35,583 unfavorable

D) $35,583 favorable

 

5) The primary reason for high actual operating profits was:

A) the variable-cost variance

B) increased fixed costs

C) higher sales volume than planned

D) lower sales volume than planned

Answer the following questions using the information below:

 

Manash Company manufactures tires.  Some of the company’s data was misplaced.  Use the following information to replace the lost data:

 

 

Actual Results

Flexible Budget Variances

Flexible Budget

Sales-Volume Variances

Static Budget

Units sold

450,000

 

450,000

 

412,500

Revenues

$168,320

$4,000 F

(A)

$5,600 U

(B)

Variable costs

(C)

$800 U

$63,440

$9,360 F

$72,800

Fixed costs

$33,120

$3,440 F

$36,560

0  

$36,560

Operating income

$70,960

(D)

$64,320

(E)

$60,560

 

6) What amounts are reported for revenues in the flexible-budget (A) and the static-budget (B), respectively?

A) $164,320; $158,720

B) $164,320; $169,920

C) $169,920; $177,920

D) $169,920; $166,720

 

7) What are the actual variable costs (C)?

A) $72,800

B) $64,240

C) $62,640

D) $54,080

8) What is the total flexible-budget variance (D)?

A) $240 unfavorable

B) $0

C) $1,360 favorable

D) $6,640 favorable