Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 23, Problem 30BP
1.
To determine
Prepare a flexible budget performance report of company C for the month ended July 31, 2018.
2.
To determine
State the effect of operating income of company C for selling 2,000 units more than the static budget level of sales.
3.
To determine
State the amount of operating income under static
4.
To determine
Describe the reason why the flexible budget performance report of company C provides more useful information than the simple static budget variance and explain the manager’s perceptions from this performance report.
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Preparing a flexible budget performance report
Cell Plus Technologies manufactures capacitors for cellular base stations and other communication applications. The company’s July 2018 flexible budget shows output levels of 8,500, 10,000, and 12,000 units. The static budget was based on expected sales of 10,000 units.
The company sold 12,000 units during July, and its actual operating income was as follows:
Requirements
Prepare a flexible budget performance report for July 2018.
What was the effect on Cell Plus’s operating income of selling 2,000 units more than the static budget level of sales?
What is Cell Plus’s static budget variance for operating income?
Explain why the flexible budget performance report provides more useful information to Cell Plus’s managers than the simple static budget variance. What insights can Cell Plus’s managers draw from this performance report.
Flexible Budgets and Standard Cost Systems 1317
> Problems Group B
P23-30B Preparing a flexible budget performance report
Learning Objective 1
Cell Plus Technologies manufactures capacitors for cellular base stations and other
communication applications. The company's July 2018 flexible budget shows output
levels of 8,500, 10,000, and 12,000 units. The static budget was based on expected
sales of 10,000 units.
3. Static Bud, Var, for Op. Inc.
$22,900 F
CELL ONE TECHNOLOGIES
Flexible Budget
For the Month Ended July 31, 2018
Budget
Amounts
per Unit
Units
8,500
10,000
12,000
Sales Revenue
$ 24
$ 204,000 $ 240,000 $ 288,000
Variable Expenses
13
110,500
130,000
156,000
Contribution Margin
93,500
110,000
132,000
Fixed Expenses
57,000
57,000
57,000
Operating Income
$ 36,500 $ 53,000 $ 75,000
The company sold 12,000 units during July, and its actual operating income was as
follows:
CELL ONE TECHNOLOGIES
Income Statement
For the Month Ended July 31, 2018
Sales Revenue
$ 295,000
Variable…
Phone Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 7,500, 9,000, and 11,000 units . The static budget was based on expected sales of 9,000 units. The company sold 11,000 units during July. Its flexible budget and actual operating income was as follows:
Requirement 1. Prepare a flexible budget performance report for July (Enter a "0” for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank )
Chapter 23 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
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Ch. 23 - Prob. 11TICh. 23 - Tipton Company manufactures shirts, During June,...Ch. 23 - Prob. 13TICh. 23 - Prob. 14TICh. 23 - Prob. 15TICh. 23 - This Try It! continues the previous Try It! for...Ch. 23 - Calculate the following variances: Fixed overhead...Ch. 23 - Prob. 18TICh. 23 - Prob. 19TICh. 23 - Prob. 20TICh. 23 - Prob. 21TICh. 23 - Prob. 22TICh. 23 - Prob. 23TICh. 23 - Prob. 24TICh. 23 - Prob. 25TICh. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNets sales volume variance for total costs is...Ch. 23 - MajorNets flexible budget variance for total costs...Ch. 23 - MajorNet Systemss managers could set direct labor...Ch. 23 - What is MajorNets direct labor cost variance for...Ch. 23 - What is MajorNets direct labor efficiency variance...Ch. 23 - FrontGrades standard variable manufacturing...Ch. 23 - Calculate the variable overhead cost variance for...Ch. 23 - Calculate the variable overhead efficiency...Ch. 23 - Prob. 10QCCh. 23 - MajorNet Systemss static budget predicted...Ch. 23 - Prob. 1RQCh. 23 - Prob. 2RQCh. 23 - What is a static budget performance report?Ch. 23 - How do flexible budgets differ from static...Ch. 23 - Prob. 5RQCh. 23 - What are the two components of the static budget...Ch. 23 - What is a flexible budget performance report?Ch. 23 - Prob. 8RQCh. 23 - Prob. 9RQCh. 23 - Give the general formulas for determining cost and...Ch. 23 - How does the static budget affect cost and...Ch. 23 - List the direct materials variances, and briefly...Ch. 23 - Prob. 13RQCh. 23 - Prob. 14RQCh. 23 - List the fixed overhead variances, and briefly...Ch. 23 - Prob. 16RQCh. 23 - Prob. 17RQCh. 23 - Prob. 18RQCh. 23 - Prob. 19RQCh. 23 - Prob. 20RQCh. 23 - Prob. 1SECh. 23 - Moje, Inc. manufactures travel locks. The budgeted...Ch. 23 - Complete the flexible budget variance analysis by...Ch. 23 - Prob. 4SECh. 23 - Setting standards for a product may involve many...Ch. 23 - Prob. 6SECh. 23 - Martin, Inc. manufactures lead crystal glasses....Ch. 23 - Martin, Inc. is a manufacturer of lead crystal...Ch. 23 - Prob. 9SECh. 23 - Prob. 10SECh. 23 - Prob. 11SECh. 23 - Prob. 12SECh. 23 - Prob. 13SECh. 23 - Prob. 14SECh. 23 - Prob. 15ECh. 23 - Murphy Company managers received the following...Ch. 23 - Prob. 17ECh. 23 - Prob. 18ECh. 23 - Prob. 19ECh. 23 - Prob. 20ECh. 23 - Prob. 21ECh. 23 - Prob. 22ECh. 23 - Prob. 23ECh. 23 - McCarthy Fender, which uses a standard cost...Ch. 23 - Cell One Technologies manufactures capacitors for...Ch. 23 - Morton Recliners manufactures leather recliners...Ch. 23 - Hear Smart manufactures headphone cases. During...Ch. 23 - Moss manufactures coffee mugs that it sells to...Ch. 23 - Review your results from Problem P23-28A. Mosss...Ch. 23 - Prob. 30BPCh. 23 - McKnight Recliners manufactures leather recliners...Ch. 23 - Headset manufactures headphone cases. During...Ch. 23 - Prob. 33BPCh. 23 - Review your results from Problem P23-33B....Ch. 23 - Download an Excel template for this problem online...Ch. 23 - This continues the Piedmont Computer Company...Ch. 23 - Prob. 1TIATCCh. 23 - Suppose you manage the local Scoopys ice cream...Ch. 23 - Drew Gastello, general manager of Sunflower...Ch. 23 - In 75 words or fewer, explain what a cost variance...
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