Phone Technolog es manutactures capactors for cellular base sations and other co
ID: 2526837 • Letter: P
Question
Phone Technolog es manutactures capactors for cellular base sations and other communications applications. The company's Juy 2010 flexible budget shows output levels of 5500. 7.00o, and 9.000 units. The static budget was baced on expected sales of 7,000 units. El (Cliak the icon to viaw the flesible budget.) The company sod 9.000 units duting Juy. and its actual operating income was as folows: ?? Resd the teauiremants Click the icon to view the income statement) Results Varianoc Budget Budget Salas RevenucExplanation / Answer
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1 2 3 4 5 1-3 9000* per unit 3-5 Budgeted amount per unit Actual Results Flexible Budget Variance Flexible Budget Sales volume variance Static Budget Units 9000 9000 2000 F 7000 Sales Revenue 24 223900 7900 F 216000 48000 F 168000 Variable Expense 12 113700 5700 U 108000 24000 U 84000 Contribution Margin 110200 2200 F 108000 24000 F 84000 Fixed Expenses 57900 1900 U 56000 0 N 56000 Operating Income 52300 300 F 52000 24000 F 28000 300 F 24000 F Flexible Budget Performance Sales Volume Variance 24300 F Static Budget Variance Requirment - 2 Increase $ 24000 (52000-28000) Requirment - 3 24300 F Higher Requirment - 4 1. Favorable sales volume variance tells whether profit increase due to Sales Units or Selling Price 2. Favorable Sales Revenue flexible budget variance means Sales price was higher than planned Good Job More Units, Higher Price