Given the following data, calculate the Total Variable Cost variance. Planning Budget Actual Results Revenue $73,000 $75,000 Variable costs $23,000 $20,000 Contribution margin $50,000 $55,000 Fixed costs $15,000 $10,000 Profit before taxes $35,000 $45,000 a. $3,000 Favorable b. $3,000 Unfavorable c. $5,000 Favorable d. $5,000 Unfavorable e. $2,000 Unfavorable f. $2,000 Favorable
Answers
Answer:
a. $3,000 Favorable
Explanation:
Variable cost variance is the difference between the budgeted variable cost and actual variable cost for a period.
Use following formula to claculate the variable cost variance
Variable cost variance = Budgeted Variable cost - Actual variable cost
Placing values in the formula
Variable cost variance = Budgeted Variable cost - Actual variable cost
Variable cost variance = $23,000 - $20,000
Variable cost variance = $3,000
As the actual cost is less than the budgeted cost, so the $3,000 is saved in respect of variable cost.
Related Questions
Issued stock for $6 cash (example).b. Purchased equipment costing $6,320, paying $4,893 in cash and charging the rest on account.c. Paid $513 in principal and $91 in interest expense on long-term debt.d. Earned $88,988 in sales revenue; collected $87,949 in cash with the customers owing the rest on account.e. Incurred $10,766 in shipping expenses, all on credit. F. Paid $28,241 cash on accounts owed to suppliers. G. Incurred $4,332 in marketing expenses; paid cash. H. Collected $620 in cash from customers paying on account. I. Borrowed $6,359 in cash as long-term debt. J. Used inventory costing $62,752 when sold to customers. K. Paid $177 in income tax recorded as an expense in the prior year.
The RST Company makes 38,000 parts to be used in its main products. The cost per part at this activity level is: Direct materials $ 6.50 Direct labor $ 6.60 Variable manufacturing overhead $ 3.75 Fixed manufacturing overhead $ 3.45 An outside supplier offered to supply RST Company this part at $18 per unit. If RST Company decides not to make the parts, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost. The annual financial advantage (disadvantage) for the company as a result of buying these parts from the outside supplier rather than making them internally would be: ($186,200) ($87,400) ($43,700) $87,400
"Jefferson Sports Medicine, Inc., offers two types of physical exams for students : the basic physical and the extended physical. The charge for the basic physical is $60, while the charge for the extended physical is $135 . Jefferson expects to perform 220 basic physicals and 190 extended physicals in July, 235 basic and 200 extended in August, and 105 basic and 110 extended in September . Prepa re the sales budget for the service revenue expected from the physical exams performed for the second quarter (July through September}, with a column for each month and for the quarter in total."
Photo Frame Company had beginning Work in Process inventory of 1,200 units. There were 3,300 units of product started during the period. Ending Work in Process inventory consisted of 1,500 units that were 50% complete. The total dollar cost associated with production of inventory was $88,000. The cost per equivalent whole unit would be which of the followingA. $51B. $34C. $45D. $37
Answers
Answer:
Jeans= 200 units
Shirt= 200 units
Explanation:
To calculate the break-even point in units, we need to use the following formula:
Break-even point (units)= Total fixed costs / Weighted average contribution margin
Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin= (22*0.5 + 27*0.5) - (14*0.5 + 19*0.5)
Weighted average contribution margin= 8
Break-even point (units)= 3,200/8
Break-even point (units)= 400 units
Jeans= 0.5*400= 200 units
Shirt= 0.5*400= 200 units
Answers
Answer:
e. $42,857.14
Explanation:
The computation of the break-even level of earnings before interest and taxes between these two options is shown below:
(EBIT) ÷ (Number of shares) = (EBIT - Interest) ÷ Number of shares
(EBIT) ÷ (75,000 shares) = (EBIT - $20,000) ÷$40,000
40,000 × EBIT = 75,000 × EBIT - $1,500,000,000
35,000 × EBIT = $1,500,000,000
After solving this,
The EBIT would be $42,857.14
The interest expense
= $320,000 × 6.25%
= $20,000
Answers
Answer:
The cash-basis net income and accrual-basis net income for the year is $19,500 and $22,800 respectively.
Explanation:
The computation is shown below:
1. Net income under cash basis:
= Received cash from customers - paid cash for salaries
= $43,000 - $23,500
= $19,500
2. Net income under accrual basis:
= Cash received - salary paid
where,
Cash received = Cash owed at the end of the year + cash received - cash owed at the beginning of the year
= $6,600 + $43,000 - $1,000
= $48,600
And, the salary paid = salary owed at the end of the year + salary paid - salary owed at the beginning of the year
= $5,600 + $23,500 - $3,300
= $25,800
Now put these values to the above formula
So, the value would equal to
= $48,600 - $25,800
= $22,800
1. Cash basis in as accounting method that recognizes revenues and expenses only when the cash is received or paid out.
Net income under cash basis = Received cash from customers - Cash paid for salaries
Net income under cash basis = $43,000 - $23,500
Net income under cash basis = $19,500
2. Accrual basis is as accounting method where accounting transactions are recorded for revenue when earned and expenses when incurred.
Net income under accrual basis = Cash received - Salary paid
Net income under accrual basis = (Cash owed at the end of the year + Cash received - Cash owed at the beginning of the year) - (Salary owed at the end of the year + Salary paid - Salary owed at the beginning of the year)
Net income under accrual basis = ($6,600 + $43,000 - $1,000) - ($5,600 + $23,500 - $3,300)
Net income under accrual basis = $48,600 - $25,80
Net income under accrual basis = $22,800
See similar question & solution here
Answers
Answer:
So we can offer for the house $180119.95
Explanation:
Monthly income =$4000
Monthly mortgage payment allowed (P)= 25% of 4000= $1000
Interest rate per month (i)= 0.5%
Number of months in total (n)= 30*12= 360
Maximum loan affordable = P*(1-(1/(1+i)^n))/i
=1000*(1-(1/(1+0.5%)^360))/0.5%
=$166791.61
Closing cost is 4% of loan value = 166791.61*4% =$6671.66
Balance Amount left for down payment = 20000-6671.66
=$13328.34
It means we can pay $6671.66 for closing cost of Loan and $13328.34 for down payment.
Cost of house paid maximum = Down payment + Affordable loan
=13328.34+166791.61
=$180119.95
So we can offer for the house $180119.95
Answers
Answer: option (B). Eurocurrencies
Explanation: Euro currency is currency deposited by nationals governments or corporations, outside of its home market. Eurocurrency is a currency commonly held in banks located outside of the country which issues the currency. Moreover is is pertinent to note that the term Eurocurrency applies to any currency and to banks in any country. Having Euro doesn’t mean the transaction has to involve European countries.
Eurocurrency is when an institution uses money from another country, but not in the originating country’s home market, and despite the name, Eurocurrency can involve any currency. For example Nigeria Naira deposited at a bank in United state is Eurocurrency.
Answers
Answer:
$600 unfavorable
Explanation:
The budgeted cost of producing 14,000 units at $5.50 per unit and with fixed costs of $19,400 is:
The variance is given by subtracting the budgeted cost by the actual cost ($97,000):
Since the variance is negative, the variance is unfavorable