70.2K

Verified Solution

Link Copied!

Exercise 16-27 (Algo) Sales Acrivity Variance (LO 16-3) The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 330,000 units with revenues of $3,300,000. Total variable costs were budgeted at $1,980,000 and fixed costs at $1,005,000. During the period, actual production and actual sales were 310,000 units. The actual revenues were $3,459,000. Actual variable costs were $17.50 per unit. Actual fixed costs were $1,035,000. Required: Prepare a sales activity variance analysis. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ Cherrylawn Corporation } \\ \hline \multicolumn{4}{|c|}{ Sales Activity Variance } \\ \hline & Flexible Budget & Sales Activity Variance & Master Budget \\ \hline \multicolumn{4}{|l|}{\begin{tabular}{l} Sales revenue \\ Less: \end{tabular}} \\ \hline \multicolumn{4}{|l|}{\begin{tabular}{l} Less: \\ Variable costs \end{tabular}} \\ \hline \multicolumn{4}{|l|}{ContributionmarginVariablecosts} \\ \hline Contribution margin & $ & & $ \\ \hline \multirow{2}{*}{\multicolumn{4}{|c|}{ Fixed costs }} \\ \hline & & & \\ \hline Operating profits & $ & 57 & $ \\ \hline \end{tabular}

Answer & Explanation Solved by verified expert

See Answer