Determine the dollar amount and label f or u each of the

Question

Master Budgets, Flexible Budgets, and Profit-Variance Analysis As part of its comprehensive planning and control system, Menendez Company uses a master budget and subsequent variance analysis. You are given the following information that pertains to the company's only product, XL- 10, for the month of December.

Required:

1. Complete the missing parts of the following profit report for December.

	Actual Results	Flexible-Budget Variance	Flexible Budget	Sales Volume Variances	Master (Static) Budget
Unit sales	50,000				40,000
Sales	$450,000				$400,000
Variable costs	375,000				280,000
Contribution margin	$ 75,000				$120,000
Fixed costs	65,000				75,000
Operating income	$ 10,000				$ 45,000

2. Based on your completed profit report, determine the dollar amount and label (F or U) each of the following variances for December:

a. Total master (static) budget variance.

b. Total flexible-budget variance.

c. Sales volume variance, in terms of operating income.

d. Sales volume variance, in terms of contribution margin.

e. Selling price variance.

Answer 1

For the facts and information provided in the case illustrated below, you have to provide answer by showing the computation part. Question: As part of its comprehensive planning and control system, Menendez Company employs a master budget and subsequent variance assessment. You are provided the following information which pertains to the company's only product, XL- 10, for the month of December. 1) Calculate the missing parts of the given profit report for December. 2) On the basis of your completed profit report, find out the dollar amount and label (F or U) each of the given variances for December: a) Total master (that is, static) budget variance. b) Total flexible-budget variance. c) Sales volume variance, in terms of the operating income. d) Sales volume variance, in terms of the contribution margin. e) Selling price variance.