Question

The following information is available for Brownstone Products Company for the month of July:

Answer 1

1. The master budget variance for July was $3,900, and this variance was favorable.

2. The July sales volume variances in terms of contribution margin and operating income are $2,800 F and $3,900 F, respectively.

3. The July flexible-budget variances in terms of contribution margin and operating income are $5,550 F and $6,650 F, respectively.

4.  Flexible budgets for the following output levels are:

                                                     3,560 units        3,980 units

Sales revenue                           $53,400               $59,700

Variable manufacturing costs     14,240                  15,920

Fixed manufacturing costs         12,460                   13,930

Variable selling and

administrative expenses             7,120                    7,960

Fixed selling and

administrative expenses            9,100                     9,100

Operating Income                   $10,480                $12,790

Data and Calculations:

                                             Actual Master      Budget   Per Unit  Variance

Units                                               3,500          4,000                          500 U

Sales revenue                          $ 54,300    $ 60,000       $15.00  $ 5,700 U

Variable manufacturing costs    10,000         16,000          4.00     6,000 F

Fixed manufacturing costs         13,000         14,000          3.50      1,000 F

Variable selling and

administrative expenses            6,500           8,000         2.00      1,500 F

Contribution margin               $24,800       $22,000                    $2,800 F

Fixed selling and

administrative expenses           8,000            9,100                        1,100 F

Total costs                              $37,500        $47,100

Operating income                  $16,800        $12,900                    $3,900 F

Sales volume variance:

Revenue per unit                   $15.51            $15.00         $0.51 F

Flexible-budget:

                                             Actual Master      Budget    Variance

Units                                               3,500          3,500            U

Sales revenue                          $ 54,300    $ 52,500       $ 1,800 F

Variable manufacturing costs    10,000         14,000         4,000 F

Fixed manufacturing costs         13,000         12,250            750  U

Variable selling and

administrative expenses            6,500           7,000           500 F

Contribution margin               $24,800        $19,250      $5,550 F

Fixed selling and

administrative expenses           8,000            9,100          1,100 F

Operating income                  $16,800         $10,150      $6,650 F

Learn more about sales volume variance at brainly.com/question/4127264

#SPJ1