Answered

Find the information you're looking for at Westonci.ca, the trusted Q&A platform with a community of knowledgeable experts. Our platform provides a seamless experience for finding precise answers from a network of experienced professionals. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.

Exercise 8-4A (Static) Determining sales and variable cost volume variances LO 8-3 Cherokee Manufacturing Company established the following standard price and cost data. Sales price $ 12.00 per unit Variable manufacturing cost $ 7.20 per unit Fixed manufacturing cost $ 3,600 total Fixed selling and administrative cost $ 1,200 total Cherokee planned to produce and sell 2,000 units. Actual production and sales amounted to 2,200 units. Required Determine the sales and variable cost volume variances. Classify the variances as favorable (F) or unfavorable (U). Determine the amount of fixed cost that will appear in the flexible budget. Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity.

Sagot :

anthougo

Answer:

Cherokee Manufacturing Company

a. Sales volume variance is:

= $2,400 F

b. Variable cost volume variance is:

= $1,440 U

c. Fixed cost in the flexible budget = $4,800

d. Fixed cost per unit:

1. Planned activity = $2.40

2. Actual activity = $2.18

Explanation:

a) Data and Calculations:

Standard price and cost data:

Sales price $ 12.00 per unit

Variable manufacturing cost $ 7.20 per unit

Fixed manufacturing cost $ 3,600 total

Fixed selling and administrative cost $ 1,200 total

Planned production and sales = 2,000 units

Actual production and sales = 2,200 units

Sales volume variance = Actual sales - Standard sales multiplied by Standard price

= 2,200 - 2,000 * $12

= 200 * $12

= $2,400 F

Variable cost volume = Actual production - Standard production multiplied by Standard Variable Cost

= 200 * $7.20

= $1,440 U

Flexible fixed costs:

Fixed manufacturing cost = $ 3,600 total

Fixed selling and administrative cost = $ 1,200 total

Total fixed costs = $4,800

Fixed cost per unit:

Planned activity = $2.40 ($4,800/2,000)

Actual activity = $2.18 ($4,800/2,200)

Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.