Problem:
1. The accountant at EZ Toys, Inc. is analyzing the production and cost data for its Trucks Division.
For October, the actual results and the master budget data are presented below.
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Actual results
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Budget data
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10,000 trucks produced and sold
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12,000 trucks planned
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Unit selling price
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$15
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Unit selling price
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$14
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Variable costs:
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Unit variable cost:
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Direct materials
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$52,800
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Direct materials
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$5
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Direct labor
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51,000
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Direct labor
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4
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Variable overhead
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23,000
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Variable overhead
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2
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Total variable costs
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$126,800
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Total unit variable costs
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$11
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Fixed overhead
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$9,000
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Fixed overhead
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$9,600
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Required:
Prepare a variance analysis to compare actual results and master budget.