Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Chapter 9, Problem 7E
To determine
Introduction: The difference between the planning budget and the flexible budget is known as activity variance. It arises due to the difference between the planned activity level and the actual activity level.
The activity variance.
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Revenue variancesKessla Taub manages the marketing department at Electronic Village. Company management has been concerned about the sales of three products and has informed Taub that, regardless of other sales, her performance for the year will be evaluated on whether she has met the sales budget for the following items:
Sales Price per Unit
Budgeted Unit Sales
Wireless backup camera
$120
2,560
Heated seat cushion
68
3,360
Wireless car phone charger
60
1,680
Actual sales for these three products, generated for the year, were as follows:
Sales Price per Unit
Sales Revenue
Wireless backup camera
$115
$312,800
Heated seat cushion
70
226,240
Wireless car phone charger
55
365,200
a. Compute the sales price variances by product.Note: Do not use negative signs with your answers.
Sales price variance
Wireless backup camera:
Answer
Answer
Heated seat cusion:
Answer
Answer
Wireless car phone charger:
Answer
Answer
Total
Answer
Answer
b.…
QUESTION 5 The following budgeted profit statement has been prepared using absorption costing principles.A company manufactures and sells a single product which has the following cost and sellingprice structure:
P/unit
P/unit
Selling price
P120
Direct material
22
Direct labour
36
Variable overhead
14
Fixed overhead
12
P84
Profit per unit
P36
The fixed overhead absorption rate is based on the normal capacity of 2,000 units per month.Assume that the same amount is spent each month on fixed overheads.Budgeted sales for next month are 2,200 units.You are required to calculate:a. The breakeven point, in sales units per month. b. The margin of safety for the next month.
c. The budgeted profit for the next month. d. The sales required to achieve a profit of P96,000.
Contribution Margin Volume Variance
Iliff, Inc., produces and sells two types of countertop ovens—the toaster oven and the convection oven. Budgeted and actual data for the two models are shown below.
Budgeted Amounts:
ToasterOven
ConvectionOven
Total
Sales:
($92 × 29,500)
$2,714,000
($155 × 15,500)
$2,402,500
$5,116,500
Variable expenses
495,000
780,000
1,275,000
Contribution margin
$2,219,000
$1,622,500
$3,841,500
Actual Amounts:
ToasterOven
ConvectionOven
Total
Sales:
($81 × 25,000)
$2,025,000
($165 × 12,500)
$2,062,500
$4,087,500
Variable expenses
539,600
712,300
1,251,900
Contribution margin
$1,485,400
$1,350,200
$2,835,600
Required:
1. Calculate the budgeted average unit contribution margin. Round your answer to the nearest cent. Use rounded answer in subsequent computations.
2.…
Chapter 9 Solutions
Managerial Accounting
Ch. 9 - Prob. 1QCh. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3QCh. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - Prob. 9QCh. 9 - Prob. 10Q
Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 2F15Ch. 9 - Prob. 3F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 -
L09-1, LO9-2, LO9-3
Adger Corporation is a...Ch. 9 - Prob. 8F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Prob. 12F15Ch. 9 - Prob. 13F15Ch. 9 - Prob. 14F15Ch. 9 - Prob. 15F15Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 -
EXERCISE 9-3 Revenue and Spending Variances...Ch. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24CCh. 9 - Prob. 25CCh. 9 - Prob. 26C
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