The master budget at Western Company last period called for sales of 226,500 units at $10.50 each. The costs were estimated to be $3.90 variable per unit and $226,500 fixed. During the period, actual production and actual sales were 231,500 units. The selling price was $10.60 per unit. Variable costs were $6.00 per unit. Actual fixed costs were $226,500.   Required:   Prepare a profit variance analysis. (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.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The master budget at Western Company last period called for sales of 226,500 units at $10.50 each. The costs were estimated to be $3.90 variable per unit and $226,500 fixed. During the period, actual production and actual sales were 231,500 units. The selling price was $10.60 per unit. Variable costs were $6.00 per unit. Actual fixed costs were $226,500.

 

Required:

 

Prepare a profit variance analysis. (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
Operating profits
Actual
Budget
$ 2,453,900✔✔
1,389,000✔
$ 1,084,900
$
226,500✔✔
838,400
WESTERN COMPANY
Profit Variance Analysis.
Manufacturing
Variances
3
U
U
U
33
>
Sales Price
Variance
F
F
LL
3
$
Flexible
Budget
0
226,500
$ (226,500)
Sales Activity
Variance
F
U
F
F
Master
Budget
$ 2,378,250
883,350✔
$ 1,494,900
226,500
$ 1,268,400
Transcribed Image Text:Sales revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profits Actual Budget $ 2,453,900✔✔ 1,389,000✔ $ 1,084,900 $ 226,500✔✔ 838,400 WESTERN COMPANY Profit Variance Analysis. Manufacturing Variances 3 U U U 33 > Sales Price Variance F F LL 3 $ Flexible Budget 0 226,500 $ (226,500) Sales Activity Variance F U F F Master Budget $ 2,378,250 883,350✔ $ 1,494,900 226,500 $ 1,268,400
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