Variable Costs Contribution margin Fixed costs Net income 219,600 $223,200 210,000 $ 13,200 Required Reconcile master budget to actual net income by calculating the sales quantity variance, selling price variance (in total), variable cost variances (in total), and a fixed cost budget variance.
Variable Costs Contribution margin Fixed costs Net income 219,600 $223,200 210,000 $ 13,200 Required Reconcile master budget to actual net income by calculating the sales quantity variance, selling price variance (in total), variable cost variances (in total), and a fixed cost budget variance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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![Part A
The Sullivan and Partners produce and sells over 100 different products. For the
past year the
master budget called for:
Sales (70,000 units)
Variable costs
Contribution margin
Fixed costs
Net income
$420,000
140,000
$280,000
200,000
$80,000
At the end of the year, the following flexible budget was prepared based on the
actual products sold:
Sales (72,000 units)
Variable costs
$432,000
144,000
$288,000
200,000
$ 88,000
Contribution margin
Fixed costs
Net income
The actual income statement for the period revealed:
Sales (72,000 units)
Variable Costs
Contribution margin
Fixed costs
Net income
$442,800
219,600
$223,200
210,000
$ 13,200
Required
Reconcile master budget to actual net income by calculating the sales quantity
variance, selling price variance (in total), variable cost variances (in total), and a fixed
cost budget variance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F44c3267a-7cbf-4915-9ddc-c86473f81261%2F9021160b-70ea-4eca-bedd-edf798c5014a%2Fttf461h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Part A
The Sullivan and Partners produce and sells over 100 different products. For the
past year the
master budget called for:
Sales (70,000 units)
Variable costs
Contribution margin
Fixed costs
Net income
$420,000
140,000
$280,000
200,000
$80,000
At the end of the year, the following flexible budget was prepared based on the
actual products sold:
Sales (72,000 units)
Variable costs
$432,000
144,000
$288,000
200,000
$ 88,000
Contribution margin
Fixed costs
Net income
The actual income statement for the period revealed:
Sales (72,000 units)
Variable Costs
Contribution margin
Fixed costs
Net income
$442,800
219,600
$223,200
210,000
$ 13,200
Required
Reconcile master budget to actual net income by calculating the sales quantity
variance, selling price variance (in total), variable cost variances (in total), and a fixed
cost budget variance.
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