How narcisco could use the variances to evaluate performance

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Reference no: EM132640726

Narcisco Publications established the following standard price and costs for a hardcover picture book that the company produces.
Standard price and variable costs

Sales price $90.00
Materials cost 18.00
Labor cost 9.00
Overhead cost 12.60
Selling, general, and administrative costs 14.40Planned fixed costs

Manufacturing overhead $270,000
Selling, general, and administrative 108,000

Narcisco planned to make and sell 30,000 copies of the books.

Requried

Question a. Prepare the pro forma income statement that would appear in the master budget

Question b. Prepare flexible budget income statements, assuming production volumes of 29,000 and 31,000 units.

Question c. Determine the sales and variable cost volume variances, assuming volume is actually 31,000 units.

Question d. Indicate whether the variances are favorable (F) or unfavorable (U).

Question e. Comment on how Narcisco could use the variances to evaluate performance.

Reference no: EM132640726

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