Assignment 2

1.

Strauss Table Company manufactures tables for schools. The 20x4

operating budget is based on sales of 20,000 units at $100 per table.
Operating income is anticipated to be $120,000. Budgeted variable costs
are $64 per unit, while fixed costs total $600,000.
Actual income for 20x4 was a surprising $354,000 on actual sales of
21,000 units at $104 each. Actual variable costs were $60 per unit and
fixed costs totaled $570,000.
Required:
Prepare a variance analysis report with both flexible-budget and salesvolume variances.

2.

Nicholas Company manufacturers TVs. Some of the company's data was

misplaced. Use the following information to replace the lost data:

Analysis

Actual
Results

Flexible
Variance
s

Units Sold

Variable Costs
Fixed Costs

$1,000

Income

Variances

Budget
103,125

$1,400 U

(B)

$200 U

$15,860

$2,340 F

$18,200

$860 F

$9,140

(D)

$16,080

(C)
$8,280
$17,740

Static

Volume

(A)

$42,080

Operating

Budget

Sales-

112,500

112,500
Revenues

Flexible

$9,140
(E)

$15,140

Required:
a.

What are the respective flexible-budget revenues?

b.

What are the static-budget revenues?

c.

What are the actual variable costs?

d.

What is the total flexible-budget variance?

e.

What is the total sales-volume variance?

f.

What is the total static-budget variance?

*****