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  • UE MC 2023-2024 Exercise 9 A Solution With Variances

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    Sami El Yadini
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    This document summarizes the forecasted and actual revenues, expenses, and profits for two categories (A and B) of a business. It shows that while total revenues were close to forecasted, expenses were higher than forecasted. As a result, the actual total profit before taxes was lower than forecasted, at a loss of $3,438,000 rather than the forecasted loss of $1,880,000. The variances are analyzed using two different methods of allocating common expenses, with both resulting in unfavorable variances that explain the increased actual loss compared to the forecast.

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    UE MC 2023-2024 Exercise 9 a Solution With Variances

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    This document summarizes the forecasted and actual revenues, expenses, and profits for two categories (A and B) of a business. It shows that while total revenues were close to forecasted, expenses were higher than forecasted. As a result, the actual total profit before taxes was lower than forecasted, at a loss of $3,438,000 rather than the forecasted loss of $1,880,000. The variances are analyzed using two different methods of allocating common expenses, with both resulting in unfavorable variances that explain the increased actual loss compared to the forecast.

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    Download as XLSX, PDF, TXT or read online from Scribd
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    6 views1 page

    UE MC 2023-2024 Exercise 9 A Solution With Variances

    Uploaded by

    Sami El Yadini
    This document summarizes the forecasted and actual revenues, expenses, and profits for two categories (A and B) of a business. It shows that while total revenues were close to forecasted, expenses were higher than forecasted. As a result, the actual total profit before taxes was lower than forecasted, at a loss of $3,438,000 rather than the forecasted loss of $1,880,000. The variances are analyzed using two different methods of allocating common expenses, with both resulting in unfavorable variances that explain the increased actual loss compared to the forecast.

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    Exercise 9 - a.

    Absorption logic
    ITEMS FORECAST ACTUAL
    Categ. A Categ. B TOTAL Categ. A Categ. B TOTAL
    1. Revenues
    Rent 15,000.0 28,000.0 43,000.0 16,800.0 27,000.0 43,800.0

    2. Expenses
    Variable 1,800.0 2,520.0 4,320.0 1,848.0 2,700.0 4,548.0
    Fixed (except depreciation) 1,860.0 2,700.0 4,560.0 2,190.0 2,400.0 4,590.0
    Depreciation 6,000.0 15,000.0 21,000.0 6,000.0 15,000.0 21,000.0
    TOTAL Gastos 9,660.0 20,220.0 29,880.0 10,038.0 20,100.0 30,138.0
    3. Direct Contribution Margin (CM) 5,340.0 7,780.0 13,120.0 6,762.0 6,900.0 13,662.0 COMMON EXPENSES
    Forecast Actual
    4.Common Expenses alocation 15000 17100
    VARIANCES
    4.1. Based on revenues 5,232.6 9,767.4 15,000.0 6,558.9 10,541.1 17,100.0 A B TOTAL
    Profit before taxes 107.4 -1,987.4 -1,880.0 203.1 -3,641.1 -3,438.0 95.7 -1,653.7 -1,558.0
    F U U
    4.2. Based on renting days 11,250.0 3,750.0 15,000.0 13,602.3 3,497.7 17,100.0 A B TOTAL
    Profit before taxes -5,910.0 4,030.0 -1,880.0 -6,840.3 3,402.3 -3,438.0 -930.3 -627.7 -1,558.0
    U U U

    Economic Assets

    Preço de Transferência Interna

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