Question

Vernon Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price $ 36.70 Materials cost 8.40 Labor cost 3.60 Overhead cost 6.00 Selling, general, and administrative costs 6.40 Planned fixed costs Manufacturing overhead $ 132,000 Selling, general, and administrative 53,000 Assume that Vernon actually produced and sold 36,000 books. The actual sales price and costs incurred follow: Actual price and variable costs Sales price $ 35.70 Materials cost 8.60 Labor cost 3.50 Overhead cost 6.05 Selling, general, and administrative costs 6.20 Actual fixed costs Manufacturing overhead $ 117,000 Selling, general, and administrative 59,000 Required a. & b. Determine the flexible budget variances and also indicate the effect of each variance by selecting favorable (F) or unfavorable (U).

Answer 1

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Step-by-step explanation:

Walton Publications

Flexible Budget variance

Flexible Budget Actual results Variances

Units 30000 30000

Sales $11,04,000 $10,74,000 $30,000 U

Variable manufacturing costs:

Materials $2,49,000 $2,55,000 $6,000 U

Labor $1,14,000 $1,11,000 $3,000 F

Overhead $1,83,000 $1,84,500 $1,500 U

Selling, general and

administrative costs $2,16,000 $2,10,000 $6,000 F

Contribution Margin $3,42,000 $3,13,500 $28,500 U

Fixed costs:

Manufacturing Overhead $1,33,000 $1,18,000 $15,000 F

Selling, general and

administrative costs $52,000 $58,000 $6,000 U

Net Income $1,57,000 $1,37,500 $19,500 U

Kindly check the attached image for the spreadsheet format