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EXHIBIT 14.4 Breakdown of Total Operating Income Variance SCHMIDT MACHINERY COMPANY Analysis of Financial Results For October 2019 (2) (3) Flexible-Budget Flexible Variances Budget (1) (4) Sales Volume Variances (5) Master (Static) Budget Actual Units 780 0 1,000 Sales Variable costs $800,000 450,000 $639,600 350,950 $288,650 160,650 $128,000 780 $624,000 351,000 $273,000 150,000 $123,000 $15,600F 50F $15,650F 10,6500 $5,000F Contribution margin Fixed costs 2200 $176,0000 99,000F $ 77,0000 0 $ 77,000U $350,000 150,000 $200,000 Operating income Analysis of Total Operating-Income Variance Total operating-income variance** =$128,000-$200,000=$72,000U Flexible-budget variance =$128,000 - $123,000 =$5,000F Sales volume variance =$123,000 - $200,000 = $77,000U *Budgeted fixed factory overhead cost = $120,000; budgeted fixed selling and administrative expense = $30,000. **Also called the total master (static) budget variance. Note: U denotes an unfavorable effect on operating income; F denotes a favorable effect on operating income. Using text Exhibit 14.4 as a guide, complete the missing parts of the following profit report for December. (If a variance has no amount, select "None" in the corresponding dropdown cell.) Actual results Flexible-budget variances Flexible budget Sales volume variances Unit sales Sales $ 101,000 505,000 383,800 Master (static) budget 90,000 $ 450,000 270,000 $ 180,000 100,000 $ 80,000 Variable costs Contribution margin $ 121,200 Fixed costs 75,000 Operating income $ 46,200 2. Based on your completed profit report, determine the dollar amount, and label (Favorable or Unfavorable)) each of the following variances for December: (If a variance has no amount, select "None" in the corresponding dropdown cell.) a. Total master (static) budget variance (also referred to as the total operating income variance for the period). b. Total flexible-budget variance. c. Sales volume variance, in terms of operating income. d. Sales volume variance, in terms of contribution margin. e. Selling price variance. Show less a. Total master (static) budget variance Total flexible-budget variance b. C. Sales volume variance, in terms of operating income Sales volume variance, in terms of contribution margin d. e. Selling price variance

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