Domestic Adams Educational Services had budgeted its training service charge at $80 per hour. The company planned to provide 34,000 hoursof training services during Year 3. By lowering the service charge to $68 per hour, the company was able to increase the actualnumber of hours to 35,300.Requireda. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U).Note: Select "None" if there is no effect (i.e., zero variance).b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U).Note: Select "None" if there is no effect (i.e., zero variance).c. Did lowering the price of training services increase revenue?a. Volume varianceb. Flexible budget varianceSales$99,600 F$ 363,000 Uc. Was the decision profitable?No

Variance arises when the actual costs differ from the standard costs. The results are favorable…

Answered: Adams Educational Services had budgeted…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 25E: Lowell Manufacturing Inc. has a normal selling price of 20 per unit and has been selling 125,000...

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Kavallia Company set a standard cost for one item at 328,000; allowable deviation is 14,500. Actual costs for the past six months are as follows: Required: 1. Calculate the variance from standard for each month. Which months should be investigated? 2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or 14,500. Now which months should be investigated?
Munoz Educational Services had budgeted its training service charge at $69 per hour. The company planned to provide 31,000 hours of training services during the year. By lowering the service charge to $63 per hour, the company was able to increase the actual number of hours to 32,800. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) c. Did lowering the price of training services increase revenue? Variance a. Volume variance b. Flexible budget variance c. Was the decision profitable? MacBook Air
Franklin Educational Services had budgeted its training service charge at $75 per hour. The company planned to provide 26,000 hours of training services during Year 3. By lowering the service charge to $57 per hour, the company was able to increase the actual number of hours to 27,600. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). c. Did lowering the price of training services increase revenue?
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Franklin Educational Services had budgeted its training service charge at $84 per hour. The company planned to provide 36,000 hours of training services during Year 3. By lowering the service charge to $66 per hour, the company was able to increase the actual number of hours to 37,900. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) c. Did lowering the price of training services increase revenue? Sales a. Volume variance b. Flexible budget variance c. Was the decision profitable ?
Campbell Industries has gathered the following information about the actual sales revenues and expenses for its pharmaceuticals segment for the most recent year. E (Click the icon to view the actual data.) Prepare a segment margin performance report for the pharmaceutical segment. Calculate a variance and a variance percentage for each line in the report. Round to the nearest hundredth for the variance percentages (for example, if your answer is 16.2384%, round it to 16.24%). Budgeted data for the same time period for the pharmaceutical segment are as follows (all data are in millions): E (Click the icon to view the budgeted data.) Begin by preparing the performance report through the contribution margin line. Next, complete the report through the segment margin line, and then, finally, complete the report through the operating income line. (Enter the variances as positive numbers. Round the variance percentages to the nearest hundredth percent, X.XX%.) Performance Report Data table…
Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided. Last Quarter This Quarter Number of detailings 440 523 Revenues $ 72,160 $ 68,800 Variable costs 27,920 31,920 Contribution margin $ 44,240 $ 36,880 Required: a. Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as “actual.”) b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin?
Assume that a company's planned level of activity is 1,000 hours and its actual level of activity is 1,100 hours. Based on this information, the company's activity variance for revenue will be: Multiple Choice either favorable or unfavorable depending on the cost formula. zero. unfavorable. favorable.
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6. A company budgets to sell 600 units of product F at a sales price of N30. The standard füll cost of production is N20 for variable costs and N8 for fixed cost, i.e. N28 in total, so that the standard profit is 2 per unit of product F. If actual sales are 620 units for N20,460. You are required to determine the: (a) Sales price variance, and (b) Sales volume variance. 7. Kanako Ltd, manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or elosing inventories and work-in- progress is negligible. The company operates a standard costing system and analysis of variance is made very month. The standard cost card for the product "ZOOM" is as follows: 0.5 kilos @ N4.00 per kilo 2hours @ N2.00 per hour 2 hours @ NO.30 per hour 2 hours @ N3.70 per hour Direct materials N2.00 Direct wages Variable overheads N4.00 N0.60 N7.40 N14.00 Fixed overheads Standard cost Standard profit Standard selling price N6.00 N20.00 Selling and administrative…
Woodruff Flowering Plants provides the following information for the month of May: Actual Sales in units Contribution margin per unit For May, Woodruff will report a(n) OA. favorable sales - mix variance B. favorable market share variance OC. unfavorable market share variance D. unfavorable sales - mix variance Fuchsia 21,000 $22 Dogwood 4.500 $19 C Fuchsia Budget 18,000 $23 Dogwood 3,200 $18

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