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Perform a static budget variance

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Question - Flexible budget preparation and analysis - Bank managements printers Inc., produces luxury chequebooks with three cheques and stubs per page. Each chequebook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September included these data:

 

Budgeted

actual

Number of chequebooks

15000

12000

Selling price per book

$20.00

$21.00

Variable costs per book

$8.00

$7.00

Total fixed costs of the months

$145,000.00

$150,000.00

The executive vice-president of the company observed that the operating income for September was much less than anticipated, despite a higher-than budgeted selling price and a lower-than-budgeted variable cost per unit.

Required - Perform a static budget variance, a sales volume variance and a flexible budget variance and explain the favourable and unfavourable variances.

Reference no: EM133108128

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