Share
Explore BrainMass

# Raven Company

All detailin attached Excel file

#### Solution Preview

From the graph provided, we can see that the sales price per racket is \$9, which is the same as actual. Total cost will include the manufacturing costs (direct materials, direct labor, variable overhead and fixed overhead) and fixed selling and administrative cost of \$7,500. With the expected volume of 8,000 units, the operating profit will be as follows: -

Sales (8,000 x \$9) \$72,000
Less: Total costs of frame (8,000 x \$6.25) \$50,000
Selling and administrative expenses \$ 7,500
Operating profit \$14,500

If the sales is 10,000 units, the operating profit should be: -

Sales (10,000 x \$9) \$90,000
Less: Total costs of frame (10,000 x \$6.25) \$62,500
Selling and administrative expenses \$ 7,500
Operating profit \$20,000

However, the actual operating profit is only \$18,758. Therefore, we determine the source of each variance for each factor, i.e., direct material, ...

#### Solution Summary

This solution is comprised of a detailed explanation to prepare a report that reconciles the profit graph with the actual results for March.

\$2.19