The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,500 units with revenues of $3,306,000. Total variable costs were budgeted at $1,928,500 and fixed costs at $952,000. During the period, actual production and actual sales were 255,100 units. The actual revenues were $3,443,000. Actual variable costs were $6.45 per unit. Actual fixed costs were $982,000. Required: Prepare a profit variance analysis. Note: Indicate the effect of each varlance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select elther option. Cherrylawn Corporation Profit Variance Analysis Actual Manufacturing Variances Sales Price Variance Flexible Budget Sales Activity Variance Master Budget Sales revenue Less: Variable costs Contribution margin $ 0 $ 0 $ 0 Less: Fixed costs Operating profits $ 0 $ 0 S 0

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1CMA: Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for...
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The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,500 units with revenues of
$3,306,000. Total variable costs were budgeted at $1,928,500 and fixed costs at $952,000. During the period, actual production and
actual sales were 255,100 units. The actual revenues were $3,443,000. Actual variable costs were $6.45 per unit. Actual fixed costs
were $982,000.
Required:
Prepare a profit variance analysis.
Note: Indicate the effect of each varlance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select
elther option.
Cherrylawn Corporation
Profit Variance Analysis
Actual
Manufacturing
Variances
Sales Price Variance Flexible Budget
Sales Activity
Variance
Master Budget
Sales revenue
Less:
Variable costs
Contribution margin
$
0
$
0
$
0
Less:
Fixed costs
Operating profits
$
0
$
0
S
0
Transcribed Image Text:The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,500 units with revenues of $3,306,000. Total variable costs were budgeted at $1,928,500 and fixed costs at $952,000. During the period, actual production and actual sales were 255,100 units. The actual revenues were $3,443,000. Actual variable costs were $6.45 per unit. Actual fixed costs were $982,000. Required: Prepare a profit variance analysis. Note: Indicate the effect of each varlance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select elther option. Cherrylawn Corporation Profit Variance Analysis Actual Manufacturing Variances Sales Price Variance Flexible Budget Sales Activity Variance Master Budget Sales revenue Less: Variable costs Contribution margin $ 0 $ 0 $ 0 Less: Fixed costs Operating profits $ 0 $ 0 S 0
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