I'm having trouble completing this: please help Exercise 16-23 Profit Variance Analysis (LO 16-4) The...
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Exercise 16-23 Profit Variance Analysis (LO 16-4) The master budget at Western Company last period called for sales of 226,500 units at $10.5 each. The costs were estimated to be $3.90 variable per unit and $226,500 fixed. During the period, actual production and actual sales were 231,500 units. The selling price was $10.60 per unit. Variable costs were $6.00 per unit. Actual fixed costs were $226,500.
Required: Prepare a profit variance analysis. (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.)
WESTERN COMPANY
Profit Variance Analysis
Actual Budget
Manufacturing Variances
Sales Price Variance
Flexible Budget
Sales Activity Variance
Master Budget
Sales revenue
$2,453,900
$23,150
F
$2,430,750
$52,500
F
$2,378,250
Less:
Variable costs
1,389,000
486,150
U
902,850
Contribution margin
$1,064,900
$1,527,900
$2,378,250
Less:
Fixed costs
226,500
226,500
226,500
Operating profits
$838,400
$1,301,400
$2,151,750
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