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Flexible Budget and Static Budget.

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Preparation of Static and Flexible Budgets- Computation of Static Budget Variance- Flexible Budget Variance and sales Volume Variance.Comments and analysis of Budget variances.

Maple Leaf Electronics Corporation manufactures electric fans. For July 2008 it budgeted to manufacture and sell 2500 electric fans at a variable cost of $55 per fan and total fixed cost of $48000 .The budgeted selling was $95 per fan.2000 fans were manufactured and sold for a selling price of $100 per fan. The actual variable costs were $65 per fan and actual fixed cost was $45000.

Required: (1 Prepare Flexible Budget and Static Budget for July 2008.
(2) Compute (a) Total static budget variance (b) Flexible Budget Variance (c) Sales Volume Variance.
(3) Comment on results in requirement 1 and 2 above

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The solution provides Actual Results, Flexible Budget and Static Budget along with Budget variances- Static Budget variance, Flexible Budget Variance and Sales Volume Variance.

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