GUESS WHO JEANS STATIC BUDGET VARIANCE FOR THE MONTH JUST ENDED Income Statement line-item Budgeted amount per unit Static Budget (A) 10‚000 units Actual Results (B) 16‚000 units Static Budget Variance (A) – (B) Revenue Variable costs: Materials Labor Overhead Total Contribution margin Fixed costs: Manufacturing Overhead Marketing costs Total fixed costs Operating
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Dallas Consulting Group Profit Variance Analysis Strategic Issues and Observations: The Dallas Consulting Group provides business strategy and operations management consulting services for its clients. Three consultant partners of the company help their clients in cost reduction by using different techniques like time streamlining production and reengineering operations. Since the company is making $80‚000 more profit than expected in year 2009‚ one of the partners‚ Dave Lundberg pointed out
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Week 4 Assignment from Textbook: Chapter 23 & 24 Esther Tate ACC/400 July 26‚ 2015 Theresa Pekron Brief Exercise 23.6 – Elements of the Budget Identify the budgets in Column B from which dollar amounts are transferred directly in constructing the budgets listed in Column A: 1. Budgeted income statement a. Direct materials budget 2. Budgeted balance sheet b. Cost of goods sold budget 3. Cash flow budget c. Production budget 4. Cost of goods sold budget d. Payables budget 5. Production
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costs‚ and those differences are known as variances‚ REASON FOR USING STANDARD COSTING Nestle is currently using Standard costing method because the related variances are valuable management tool. If a variance arises‚ management becomes aware that manufacturing costs have differed from the standard (planned. expected) costs. • If actual costs are greater than standard costs the variance is unfavorable. An unfavorable variance tells nestle’ management
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Managerial Accounting Case ‘Waltham Motors Division’ Answer 1: Breakeven point If Waltham Motors Division sells 13‚326 units‚ it will breakeven. But why Waltham incurred net losses when it sold more than 13‚326 units in May? The unfavorable cost variances (see answer 2 and 3) and Waltham’s high operating leverage were major reasons for its financial problems. Waltham’s operating leverage is 3.85 times‚ which indicates that the operating income is very sensitive to changes in sales. Answer
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Direct labour cost =4‚813‚000 dollars Budgeted Direct Labour cost= 4‚400‚000 dollars Variance = Actual Direct labour cost - Budgeted Direct Labour cost =4‚813‚000 dollars - 4‚400‚000 dollars = 413‚000 dollars The variance is said to be unfavorable because the actual amount spent on direct labour is more than the amount that is budgeted for‚ meaning that Kaufmann spent more on
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in 8 decreased to $27‚428. They need to increase their exposure within the bike market. They need to consider redoing their website‚ the website allows them to reach a wider audience 24 hours a day 7 days a week. Increasing advertising could be a favorable outcome on net sales since net sales were down in year 8 by -15%. Net sales are another area of concern within the budgeting schedule. They need to increase the net sales to meet their $5‚247‚450 budget for year 9. The budget chosen is too high
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serves as a review of sales variances. Since all costs are fixed‚ it is unnecessary to do a variance analysis based on contribution. Instead‚ the analysis is better done based solely on revenues. The variances shown in Exhibit 1 are computed for the “levels” explained in the “Note on Managing Against Expectations.” Students should recognize the following points: 1. Profit was $40‚000 more than expected (Total Variance). 2. There was a total unfavorable Volume Variance of $42‚000 due to the
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Katie Ebert JET2 Task 2 #000276281 There are a few areas of concern when looking over Competition Bike’s budget for the upcoming year (Year 9). This budget estimates that 3‚510 units will be sold. CB has just experienced a 15 % decline in sales‚ due to the economic situation. In year 8‚ CB sold 3‚400 units. This flexible budget is allowing 110 more units be added into the mix. Although sales trends have remained consistent‚ despite the decline in sales from professional riders‚ it might
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indicators into the evaluation process. | E. | They provide performance data on a real-time basis. | | 5. | Another name for the total operating income variance for a period is: A. | Flexible-budget variance. | B. | Master (static) budget variance. | C. | Sales volume variance. | D. | Total income variance. | E. | Sales mix variance. | | 6. | Cripe Corporation maintains ending inventory for each month at 5% of the following month ’s sales. It predicted the following sales (in units)
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