The Following Data Are for the Month of January for the Soloway

question 128

Essay

The following data are for the month of January for the Soloway Company.Assume the cost driver is the number of units sold.
Static budget data:
Sales of 9,000 pairs at $90 per pair
Variable costs of $69 per pair
Total fixed costs $108,000
Actual results:
Sales of 9,600 pairs at $87 per pair
Variable costs of $72 per pair
Total fixed costs $109,200
Required:
A) What is the static budget operating income?
B) What is the sales activity variance for operating income?
C) What is the flexible budget variance for operating income?

• A) What is the static budget operating income?
• B) What is the sales activity variance for operating income?
• C) What is the flexible budget variance for operating income?

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Definitions:

Backward Elimination

A stepwise regression technique used in statistical analysis to select significant variables by starting with all variables and successively removing the least significant ones.

Forward Selection

A stepwise regression method where variables are added one by one to the model based on their statistical significance.

Stepwise Regression

A statistical method of building a model by adding or removing predictors based on their statistical significance.

Independent Variable

A variable in an experiment that is manipulated or changed by the researcher to observe its effects on the dependent variable.