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MISSISSIPPI CORPORATION manufactures ONE PRODUCT. The company prepared a master budget for $2021$ which included the following pro$-$forma income statement, which is based on an expected production and sales volume of $15,000$ units. MISSISSIPPI CORPORATION BUDGETED INCOME STATEMENT FOR THE YEAR ENDING DECEMBER $31,2021$ The actual income statement for the year was as follows, based on $18,000$ units were actually produced and sold: REQUIRED: $1.$ Describe in detail the planning process by which the budgeted results were arrived at$.2.$ Prepare a comprehensive and meaningful performance report for the year by computing the $3$ things accounting for the difference between a budgeted and actual result: a$)$ the static budget variance, b$)$ the volume variance and c$)$ the flexible budget variance. $3.$ Provide a summary of your findings regarding the Company's results for the period. Which of these variances are considered "controllable" and which are not? $4.$ Assuming that the company manufactures ONE PRODUCT, explain the company's SALES performance. $5.$ If$,$ instead, the company manufactured MULTIPLE PRODUCTS, what might have accounted for the variances noted in #$3$ above? NOW ASSUME that the following standards have been established for the production of one unit: Direct materials $5$lbs@$$13$ per lb$.$ Direct Labor $1$ hour @ $\backslash$$$15$ per hr$.$ The actual results shown above reflect actual materials usage of $118,500$ pounds and actual labor of $22,240$ hours $6.$ What is meant by a standard, as used above? WHY are these important? $7.$ Further break down the Flexible Budget Variance $($Standard Cost Variance$)$ by computing and analyzing the direct materials price and usage $($quantity$)$ variances AND the direct labor rate and efficiency variances. Explain TWO possible causes for each. $8.$ NOW ASSUME that the company uses a standard costing system for recording product costs. The company recognizes direct materials variances at the time of usage. Joumalize the following, assuming that the company uses normal costing AND standard costing: a$)$ Direct materials purchases, on account b$)$ Direct materials payments to vendors c$)$ Direct materials usage in production d$)$ Direct materials variances e$)$ Direct labor incurrence in production f$)$ Payments to direct labor employees $9.$ Provide the journal entries required to dispose of the variances computed in #$8($d$)$ and #$8($g$).$ above, assuming that these amounts are considered immaterial. $10.$ NOW ASSUME that the variances computed above are considered material. Would this change the entry? How would this be handled? What additional information would be needed? answer $6-10$

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