Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided. Last Quarter This Quarter Number of detailings 440 523 Revenues $ 72,160 $ 68,800 Variable costs 27,920 31,920 Contribution margin $ 44,240 $ 36,880 Required: a. Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as “actual.”) b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin?
Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided. Last Quarter This Quarter Number of detailings 440 523 Revenues $ 72,160 $ 68,800 Variable costs 27,920 31,920 Contribution margin $ 44,240 $ 36,880 Required: a. Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as “actual.”) b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...
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Classics, Ltd., details cars. Classics wants to compare this quarter’s results with those for last quarter, which is believed to be typical for operations. Assume that the following information is provided.
Last Quarter | This Quarter | |||
Number of detailings | 440 | 523 | ||
Revenues | $ | 72,160 | $ | 68,800 |
Variable costs | 27,920 | 31,920 | ||
Contribution margin | $ | 44,240 | $ | 36,880 |
Required:
a. Compute the flexible budget and sales activity variance and prepare a profit
b. What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.’s contribution margin?
![equired:
Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master
udget and this quarter as "actual.")
What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.'s contribution
argin?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as
"actual.") (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do
not select either option. Enter your answers rounded to the nearest whole number.)
Variable Cost
Variance
Actual
Sales Price Variance
Flexible
Master
Sales Activity Variance
Budget
Budget
Sales revenue
68,800
Less:
Variable Costs
31,920
F
Contribution margin
Required B >
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ce
道
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Transcribed Image Text:equired:
Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master
udget and this quarter as "actual.")
What impact did the changes in number of detailings and average revenues (i.e., sales price) have on Classics, Ltd.'s contribution
argin?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the flexible budget and sales activity variance and prepare a profit variance analysis. (Hint: Use last quarter as the master budget and this quarter as
"actual.") (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do
not select either option. Enter your answers rounded to the nearest whole number.)
Variable Cost
Variance
Actual
Sales Price Variance
Flexible
Master
Sales Activity Variance
Budget
Budget
Sales revenue
68,800
Less:
Variable Costs
31,920
F
Contribution margin
Required B >
< Prev
4 of 5
Next >
ce
道
%24
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