Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 50

Flexible Budget and Operating-Income Variances Assume that Schmidt Machinery Company (Exhibit 14.1) manufactured and sold 900 units for $840 each in June. The company incurred $414,000 total variable expenses and $180,000 total fixed expenses.
Required for the Month of June:
1. Prepare a flexible budget for the production and sale of 900 units.
2. Compute for June:
a. The sales volume variance, in terms of operating income.
b. The sales volume variance, in terms of contribution margin.
3. Calculate for June:
a. The total flexible-budget (FB) variance.
b. The total variable cost flexible-budget variance.
c. The total fixed cost flexible-budget (FB) variance.
d. The selling price variance.