The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 280,000 units with revenues of $3,360,000. Total variable costs were budgeted at $1,960,000 and fixed costs at $970,000. During the period, actual production and actual sales were 256,000 units. The actual revenues were $3,447,500. Actual variable costs were $6.00 per unit. Actual fixed costs were $1,000,000. Required: Prepare a profit variance analysis. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Sales revenue Less Variable costs Contribution margin Less Fixed costs Onoration profe $ S Actual 0 nt Cherrylawn Corporation Profit Variance Analysis Manufacturing. Variances Sales Price Variance Flexible Budget $ 0 Sales Activity Variance Master Budget n
The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 280,000 units with revenues of $3,360,000. Total variable costs were budgeted at $1,960,000 and fixed costs at $970,000. During the period, actual production and actual sales were 256,000 units. The actual revenues were $3,447,500. Actual variable costs were $6.00 per unit. Actual fixed costs were $1,000,000. Required: Prepare a profit variance analysis. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Sales revenue Less Variable costs Contribution margin Less Fixed costs Onoration profe $ S Actual 0 nt Cherrylawn Corporation Profit Variance Analysis Manufacturing. Variances Sales Price Variance Flexible Budget $ 0 Sales Activity Variance Master Budget n
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1CMA: Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for...
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Qd 61.
Transcribed Image Text:The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 280,000 units with revenues of
$3,360,000. Total variable costs were budgeted at $1,960,000 and fixed costs at $970,000. During the period, actual production and
actual sales were 256,000 units. The actual revenues were $3,447,500. Actual variable costs were $6.00 per unit. Actual fixed costs
were $1,000,000.
Required:
Prepare a profit variance analysis.
Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select
either option.
Sales revenue
Less
Variable costs
Contribution margin
Less
Fixed costs
naration profe
$
S
Actual
0
n
Cherrylawn Corporation
Profit Variance Analysis
Manufacturing.
Variances
Sales Price Variance Flexible Budget
$
0
Sales Activity
Variance
Master Budget
n
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