Question

Actual direct manufacturing labor wage rate 4. Standard quantity of direct materials allowed (in pounds) 5. Actual quantity of direct materials used (in pounds) 6. Actual quantity of direct materials purchased in pounds) 7. Actual direct materials price per pound Req in nvene 7-37 Comprehensive variance analysis review. Blaumvogel is a single-product company that produces and sells product P. For the year 2014, the following budgeted absorption costing manufacturing costs per product are: Oprating Material Variable costs Fixed costs 2 kg at $3s6 Fle s 2 S 6 $14 The variable selling costs are $2 per unit, and the fixed selling costs are $400,000 per year The normal production and sales are 100,000 units per year. The budgeted production for 2014 is 90,000 units, the budgeted sales for 2014 are 80,000 units. During 2014, the selling price will be $25 per unit On Dec.31, 2014, the following actual data are given: Production: 84,000 units Sales: 82,000 units Selling price: $24 per unit Purchase price of material: $3.50 per k Use of material: 160,000 kg - Variable costs of production department: $2 per unit Fixed costs of production department: $580.000 Variable costs of selling department: $2.50 per unit Fixed selling costs:$400,000 1. Calculate the static budget variance for operating income. Required le budget variance for operating income and the sales volume variance for operating income. 3. Divide your answer to 2 into individual variances 4. Divide your answer to 3 into subvariances, if applicable.

Answer 1

Answer 1-4 Static budget variance for operating income:- (All fig. are in $ value) Actual results Flexible budget variance 2 1-3 18000 U Flexible budget Static budget Sales volume variance 4 3-5 20000 F Units sold Selling price Revenues 82000 $24 Per unit 1968000 82000 $25 Per unit 2050000 80000 S25 Per unit 2000000 532000 U 500000F Variable c Materials Use of material Material cost (Variance) VC of production dept Units produced Variable cost of production Variable cost of selling dept Total variable cost (Variance) $3.50 160000 KG 560000 $2 84000 168000 164000 892000 $6 $6 68000 F 492000 12000 F 480000 84000 F 168000 164000 824000 12000 U 4000 F 4000 F 180000 160000 820000 68000 F Fixed cost of production (Variance) Fixed cost of selling dept (Variance Total fixed cost (Variance) 580000 400000 980000 88000 F 88000 F 156000 F 492000 400000 892000 12000 F 480000 12000 F 880000 Total Costs (Variance) Gross Margin (Variance) 1872000 96000 1716000 334000 16000 F 34000 F 1700000 300000 238000 U Static budget variance 204000 U Flexible budget variance: 230000 U ales volume variance: 34000 F