Timberlake Company planned for a production and sales volume of 12,000 units.However,the company actually makes and sells 13,000 units. \(\begin{array}{l} \begin{array}{|l|} \hline\\ \hline \text { Number of units }\\ \hline \text { }\\ \hline \text { Sales revenue }\\ \hline \text { Variable manufacturing costs: }\\ \hline \text { Materials }\\ \hline \text { Labor }\\ \hline \text { Overhead }\\ \hline \text { Variable G,S\&A }\\ \hline \text { Contribution margin }\\ \hline \text { Fixed costs }\\ \hline \text { Manufacturing overhead }\\ \hline \text { G,S\&A }\\ \hline \text { Net income }\\ \hline \end{array} \begin{array}{l|} \hline \\ \hline \\ \hline \text { Per unit standards}\\ \hline \$ 65.00 \\ \hline \\ \hline\$ 11.00 \\ \hline\$ 9.00 \\ \hline\$ 4.20 \\ \hline\$ 11.00 \\ \hline \\ \hline \\ \hline \\ \hline \\ \hline \\ \hline \end{array} \begin{array}{l|} \hline \text {Static Budget}\\ \hline12,000\\ \hline\\ \hline \$ 780,000 \\ \hline\\ \hline 132,000 \\ \hline 108,000 \\ \hline50,400 \\ \hline \underline {132,000} \\ \hline \$ 357,600 \\ \hline\\ \hline 100,800 \\ \hline \underline {45,000} \\ \hline \$ 211,800\\ \hline \end{array} \begin{array}{l|} \hline \text { Flexible Budget}\\ \hline 13,000\\ \hline\\ \hline \$ 845,000 \\ \hline\\ \hline 143,000 \\ \hline 117,000 \\ \hline 54,600 \\ \hline \underline {143,000} \\ \hline \$ 387,400 \\ \hline\\ \hline 100,800 \\ \hline \underline {45,000 }\\ \hline \$ 241,600\\ \hline \end{array} \end{array}\) What was the sales volume variance?

A) $65,000 favorable B) $65,000 unfavorable C) $29,800 unfavorable D) $29,800 favorable A) $65,000 favorable B) $65,000 unfavorable C) $29,800 unfavorable D) $29,800 favorable

At the beginning of the period,Cambridge Company estimated that sales would be 10,000 units.Actual sales totaled 14,000 units.The manager was very excited about the unexpected additional income that the extra 4,000 units would produce.Imagine her surprise upon seeing the following report: $\begin{array}{c} \begin{array}{|l|} \hline \\ \hline \text {Number of units}\\ \hline \\ \hline \text {Sales}\\ \hline \text {Less variable costs:}\\ \hline \text {Naterials}\\ \hline \text {Labor}\\ \hline \text {Overhead}\\ \hline \text {Selling and admin.}\\ \hline \text {Contribution margin}\\ \hline \text {Less fixed costs:}\\ \hline \text {Manifactuing}\\ \hline \text {Selling and admin.}\\ \hline \text {Net income}\\ \hline \end{array} \begin{array}{c|} \hline \text {Static Budget }\\ \hline10,000\\ \hline\\ \hline\$\quad500,000\\ \hline\\ \hline12,000\\ \hline100,000\\ \hline50,000\\ \hline20,000\\ \hline\$\quad210,000\\ \hline\\ \hline30,000\\ \hline60,000\\ \hline\$\quad120,000\\ \hline \end{array} \begin{array}{r|} \hline\text {Actual Results}\\ \hline14,000\\ \hline\\ \hline \$ 600,000 \\ \hline \\ \hline 164,000 \\ \hline 134,000 \\ \hline 72,000 \\ \hline 30,000 \\ \hline\$ \quad 200,000) \\ \hline\\ \hline 32,000 \\ \hline 56,000 \\ \hline \$ \quad 112,000 \\ \hline \end{array} \end{array}$ The company's owner is very upset,charging that the manager did a lousy job of controlling costs. Required: 1)Prepare a performance report that can be used to evaluate the owner's charge that the manager did a poor job of controlling costs.Be sure to label variances as favorable or unfavorable. 2)Is the owner justified in charging the manager with poor cost control? Why or why not?

1) 2)No,the owner is not justified in

The following information is provided by the Atlas Company: $\begin{array}{ll} \text { Actual direct material cost } & \$ 20,000 \\ \text { Standard direct material cost } & \$ 24,000 \\ \text { Direct material usage variance } & \$ 3,000 \text { favorable } \end{array}$ What is the direct material price variance?

A) $1,000 favorable B) $1,000 unfavorable C) $5,000 unfavorable D) Not enough information is provided A) $1,000 favorable B) $1,000 unfavorable C) $5,000 unfavorable D) Not enough information is provided