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skully skully
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7 years ago
Sun-Bright Fixtures Company is evaluating a change in operating income between 2012 and 2013. Management has compiled the following data:

Revenues   2012   2013
$49 per fixture × 1,000,000 units; $51 per unit × 1,000,000 units   $49,000,000   $51,000,000
Costs
Direct Materials Costs
($1.90 per cm × 5,000,000 cm; $2.20 per cm × 4,850,000 cm)   $9,500,000   $10,670,000
Conversion Costs
($5.30 cm × 6,750,000 cm; $5.45 cm × 6,600,000 cm)   $35,775,000   $35,970,000
Total Costs   
   $45,275,000   $46,640,000
Operating Income         
                                                        
Change in Operating Income

Required
Compute the operating incomes for 2012 and 2013 and the change in operating income. Identify whether the change is a favorable change, F, or an unfavorable, U, variance.
A) 2011=$2,890,000 and 2012=$4,360,200; $985,000; U
B) 2011=$3,725,000 and 2012=$4,360,000; $635,000; U
C) 2011=$3,940,000 and 2012=$4,500,000; $1,850,00; F
D) 2011=$1,030,000 and 2012=$1,000,000; $30,000; U
E) 2011=$1,000,000 and 2012=$1,030,000; $30,000; F
Textbook 
Managerial Accounting: Decision Making and Motivating Performance

Managerial Accounting: Decision Making and Motivating Performance


Edition: 1st
Authors:
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Managerial Accounting: Decision Making and Motivating Performance
University of Pittsburgh
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noitulovenoitulove
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skully Author
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7 years ago
Thank you for answering correctly
Managerial Accounting: Decision Making and Motivating Performance
University of Pittsburgh
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