Accounting/Pension

This is what your MT 2 will look like. You will download a word document with the questions and enter answers in the ICON quiz.

Problem for Quiz 8

Doyle and company provide the following information about the standard cost per unit for their only product.

Price $120.00 Variable manufacturing costs 80.00 Fixed manufacturing costs 20.00 Variable selling expenses 3.00 Fixed selling expenses 12.00 Profit $ 5.00

During April, the firm reported the following actual income statement:

Revenue $2,410,740.00 COGS (at standard) 2,043,000.00 Manufacturing cost variances 8,830.00 Gross margin 358,910.00 SGA cost (at standard) 301,290.00 SGA variances 9,457.50 Profit $ 48,162.50

You know the following:

· Production volume variance is $8,600 F and the fixed overhead spending variance was $3,000 F. The firm sold all the units it made and there was no change in any inventory.

· The variable SGA spending variance was $5,107.50. The firm allocates VSGA using the number of units as the basis.

Hint: Use the PVV to figure out the change in volume relative to the budget and the COGS (std) to figure out actual sales.

Compute the following:

1. Budgeted profit

2. Sales volume variance

3. Sales price variance

4. Variable manufacturing cost variance

5. Fixed SGA spending variance