| Coopie Awards sold 43,000 brass plaques for the current year with the following results. In the discussion forum comment on Coopie Awards results. |
| Hint: Preparing a flexible budget will help in analyzing the results. Please show the flexible budget on this tab. |
| | Actual Results | Budget based on 45000 unis | Variance |
| Sales Revenue | $ 1,548,000 | $ 1,575,000 | $27,000 | Unfavorable |
| Direct Materials costs | 498000 | 518400 | $20,400 | Favorable |
| Direct Labor Costs | 94800 | 99000 | $4,200 | Favorable |
| Overhead Costs | 126000 | 126,000 | $0 |
| total dierct costs | $ 718,800 | $ 743,400 | $24,600 | Favorable |
| Selling and administrative cost | 700000 | 729550 | $29,550 | Favorable |
| operating income | $ 129,200 | $ 102,050 | ($27,150) | Favorable |
| Flexible budget |
| | Actual Results | Budget based on 43000 unis | Variance |
| Sales Revenue | $ 1,548,000 | $ 1,505,000 | ($43,000) | Favorable |
| Direct Materials costs | 498000 | 495360 | ($2,640) | Unfavorable |
| Direct Labor Costs | 94800 | 94600 | ($200) | Unfavorable |
| Overhead Costs | 126000 | 126,000 | $0 |
| total dierct costs | $ 718,800 | $ 715,960 | ($2,840) | Unfavorable |
| Selling and administrative cost | 700000 | 704350 | $4,350 | Favorable |
| operating income | $ 129,200 | $ 84,690 | ($44,510) | Favorable |
| As per the above flexible budget, we can say that overall the company has sold the brass plaques with higher selling price by $1, resulting into favorable sales revenue. |
| There has been unfavorable cost due to spending more than the budgets. But may be the higher cost was incurred for better quality and so the unit price to be sold was increased by $1 |
| However, there was saving in selling and administrative cost resulting into favorable result. |
| Overall the net income has resulted a favorable result by $44,510 |
| Even though the flexible budget seems to be good, It still requires a further analysis for the favorable and unfavorable results. |
| Note: In absence of information, Overhead cost is assumed to be fixed |