Top Posters
Since Sunday
5
o
5
4
m
4
b
4
x
4
a
4
l
4
t
4
S
4
m
3
s
3
New Topic  
shbensonjr shbensonjr
wrote...
Posts: 134
Rep: 0 0
A year ago
Kevin Jarvis is the controller of Bitterroot Industries. Kevin prepared the following budgeted income statement at various levels of sales. After careful review of the budgeted income statements, and after discussions with the sales and production managers, the CEO determines that the best alternative is to base the budget on a sales volume of 30,000 units.

Budgeted Income Statements
Units20,00030,00040,000
Sales$1,240,000$1,860,000$2,480,000
Variable costs
  Direct material340,000510,000680,000
  Direct labor300,000450,000600,000
  Overhead   360,000   540,000   720,000
Total variable costs1,000,0001,500,0002,000,000
Contribution margin240,000360,000480,000
Fixed costs
  Overhead62,00062,00062,000
  Rent46,00046,00046,000
  Insurance28,00028,00028,000
  Advertising    15,000     15,000     15,000
Total fixed costs  151,000   151,000   151,000
Operating income$     89,000$   209,000$   329,000

Actual results for the year were 28,000 units, reflected in the following income statement:

Sales$1,764,000
Variable costs
  Direct material504,000
  Direct labor434,000
  Overhead   509,600
Total variable costs1,447,600
Contribution margin316,400
Fixed costs
  Overhead64,200
  Rent45,800
  Insurance29,100
  Advertising    14,000
Total fixed costs   153,100
Operating income$   163,300
What is the sales volume variance for direct labor?

▸ $28,000 unfavorable

▸ $6,000 unfavorable

▸ $28,000 favorable

▸ $30,000 favorable
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
Author:
Read 40 times
1 Reply
Replies
Answer verified by a subject expert
solid1solid1
wrote...
Posts: 122
Rep: 0 0
A year ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

shbensonjr Author
wrote...

A year ago
This site is awesome
wrote...

Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
wrote...

2 hours ago
Brilliant
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers
  1154 People Browsing
Related Images
  
 4416
  
 71
  
 399
Your Opinion

Previous poll results: Who's your favorite biologist?