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Problem 15-20A (Algo) Determining sales and variable cost volume variances LO 15-2, 15-3, 15-4 Stuart Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative 36.20 8.50 4.10 5.90 6.20 $ 127,000 46,000 Stuart planned to make and sell 38,000 copies of the book. Required: a.-d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 37,000 and 39,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 39,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) Volume Variances Master Budget 38,000 Flexible Budgets 37,000 39,000 Number of units Variable manufacturing costs 0 0 01 Fixed costs $ 0 $ 0 $ 0 Problem 15-21A (Algo) Determining and interpreting flexible budget variances LO 15-5 Adams Publications established the following standard price and costs for a hardcover picture book that the company produces. $ Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative 36.20 8.20 3.70 6.30 6.40 $133,000 45,000 Assume that Adams actually produced and sold 35,000 books. The actual sales price and costs incurred follow: $ Actual price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Actual fixed costs Manufacturing overhead Selling, general, and administrative 35.20 8.40 3.60 6.35 6.20 $118,000 51,000 Required a. & b. Determine the flexible budget variances and also indicate whether each variance is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) Flexible Budget Variances 25,000 U $ Sales revenue Variable manufacturing costs Materials Labor 5,000 (U 2,500F 1,250 U 6,000 F 23,750 U Overhead Variable selling, general, and administrative costs Contribution margin Fixed costs Manufacturing overhead Selling, general, and administrative costs 15,000 F 6,000 (U 14,750 U Net income $

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