Static Budget, Flexible Budget & Variances
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Engle Manufacturing Company established the following information of prices and costs:
Sale Price $50 por unidad
Variable cost of production $32 por unidad
Fixed costs total of production $100,000
Fixed costs total of sale and administrative $40,000
Engle expects that to produce and to sell 15,000 units. The production and the current sales elevated to 16,000 units.
It required:
A) Determine the variance of the sales volume, include the variance
by the sales and the variable costs of production.
B) To classify the variance in Favorable (F)
Or Unfavorable (D).
(a), (b)
Static Flexible Variance favorable or
budget budget Unfavorable
1.Number of
units
2.Sales
3.Variable
costs of
manufacture
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Solution Summary
The solution contains the computation of variance between static budget and flexible budget.
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