The Vermont Company Has Requested a Performance Report That Reports

Essay

The Vermont Company has requested a performance report that reports both sales activity variances and flexible budget variances.The following table of information is provided: $\begin{array}{c}\begin{array}{|l|}\hline \text { Column (1)} \\ \hline \\\hline \\\hline \text {Number of units}\\\hline \\\hline \text {Sales}\\\hline \text {Less variable costs:}\\\hline \text {Materials}\\\hline \text {Labor}\\\hline \text {Overhead}\\\hline \text {Selling and admin.}\\\hline \text {Contrileution margin}\\\hline \text {Less fixed costs:}\\\hline \text {Mannactuing}\\\hline \text {Selling and admin.}\\\hline \text {Net income}\\\hline \end{array}\begin{array}{c|}\hline \text {(2)}\\\hline \text { Static } \\ \hline \text { Budget } \\ \hline 16,200 \\\hline \\\hline \$ 430,000\\\hline \\\hline 102,200 \\ \hline 86,000 \\ \hline 51,600 \\ \hline 34,400 \\ \hline \$ \quad 155,800 \\ \hline\\\hline 36,000 \\\hline 74,000 \\\hline\$ \quad 45,800 \\\hline\end{array}\begin{array}{c|}\hline \text {(3)}\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\end{array}\begin{array}{c|}\hline \text {(4)}\\\hline \text { F/U}\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\end{array}\begin{array}{c|}\hline \text {(5)}\\\hline \text { Flexible } \\ \hline \text { Budget } \\ \hline 18,000 \\\hline \\\hline \$ 450,000\\\hline \\\hline 108,000 \\ \hline90,000 \\ \hline 54,000 \\ \hline 36,000 \\ \hline \$ \quad 162,000 \\ \hline\\\hline 36,000 \\\hline 74,000 \\\hline\$ \quad 52,000 \\\hline \end{array}\begin{array}{c|}\hline \text {(6)}\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline \end{array}\begin{array}{c|}\hline \text {(7)}\\\hline \text { F/U}\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\\\hline\end{array}\begin{array}{c|}\hline \text {(8)}\\\hline \text { Actual } \\ \hline \text { Budget } \\ \hline 18,000 \\\hline \\\hline \$ 460,000\\\hline \\\hline 110,000 \\ \hline92,000 \\ \hline 50,000 \\ \hline 34,000 \\ \hline \$ \quad 174,000 \\ \hline\\\hline 34,000 \\\hline 76,000 \\\hline\$ \quad 64,000 \\\hline \end{array}\end{array}$
Required:
1)Compute and enter variances in columns 3 and 6.In column 3,enter the variance (difference)between column 2 and column 5;in column 4,label the variance as favorable (F)or unfavorable (U).In column 6,enter the variance between columns 5 and 8,and in column 7 indicate whether this variance is favorable or unfavorable.
2)Which column contains sales volume variances and which column contains flexible budget variances?
3)Comment on this company's performance.