Bach Table Company Manufactures Tables for Schools

question 10

Essay

Bach Table Company manufactures tables for schools.The current year operating budget is based on sales of 40,000 units at $50 per table.Operating income is anticipated to be $300,000.Budgeted variable costs are $30 per unit, while fixed costs total $500,000.Actual income for the year was a surprising $2,268,000 on actual sales of 42,000 units.Actual variable costs were $33 per unit and fixed costs totaled $550,000.Required:
Prepare a Level 2 variance analysis report with both flexible-budget and sales-volume variances.

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Definitions:

Legally Determined Market Prices

Prices set by law or regulation rather than by market forces of supply and demand.

Ticket Scalping

The practice of buying tickets to an event and reselling them at a higher price, often to profit from high demand and limited supply.

Equilibrium

A state of balance in a market or system where opposing forces cancel each other out and no changes occur over time.

Price Floor

A government- or body-imposed price control or limit on how low a price can be charged for a product.