The following information is available for Brownstone Products Company for the month of July: ...
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Accounting
The following information is available for Brownstone Products Company for the month of July:
Actual
Master Budget
Units
3,900
4,000
Sales revenue
$
60,400
$
60,000
Variable manufacturing costs
20,400
16,000
Fixed manufacturing costs
14,200
13,300
Variable selling and administrative expenses
9,100
8,000
Fixed selling and administrative expenses
10,500
10,200
Required:
1. What was the total operating income variance for July? (Note: this variance is also called the master (static) budget variance for the period.) Was this variance favorable (F) or unfavorable (U)?
2. Compute the July sales volume variance and the flexible-budget variance for the month, both in terms of contribution margin and in terms of operating income.
4. Prepare pro forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels:
a. 3,890 units.
b. 4,290 units.
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