Task: The following information is available for Brownstone Products Company for the month of July
|
|
Actual
|
Master Budget
|
|
Units
|
3,800
|
4,000
|
|
Sales revenue
|
$53,200
|
$60,000
|
|
Variable manufacturing costs
|
19,000
|
16,000
|
|
Fixed manufacturing costs
|
16,000
|
15,000
|
|
Variable selling and administrative expenses
|
7,700
|
8,000
|
|
Fixed selling and administrative expenses
|
10,000
|
9,000
|
Task 1. Set up a spreadsheet to compute the July sales volume variance and the flexible-budget variance for the month in terms of both contribution margin and operating income
Task 2. Create an electronic spreadsheet that will allow the firm to prepare pro form a budgets for activities within the relevant range of operations and prepare flexible budgets when sales are:
a. 3,750 units
b. 4,150 units