CMA Study Group

Can explain

  • 1.  Can explain

    Posted 18 days ago


  • 2.  RE: Can explain

    Posted 18 days ago
    Good morning, Ayat,

    Here is how I did it and believe the answer is 121,000 hours.
    Actuals Price
    Variance
    Flex Budget Volume
    Variance
    Static Budget
    same as Flex      121,000.00
               
     $    60,500.00
     $  110,000.00    $ 110,000.00    $    110,000.00 Fixed
     $  178,500.00  8000 U   $ 170,500.00  5000 F   $    165,500.00

    The only thing the flex budget equals to actuals is Quantity.  I got the total bottom line Flex Budget total of $170,500 using the price and volume variances. Since there is an Unfavorable price amount of $8000, the flex budget total must be $170,500.  Deduct the fixed of $110,000 to get $60,500.  $60,500 / .50 per hour = 121,000 hours.

      Let me know if you have questions.  
    Thanks,
    Rebecca





  • 3.  RE: Can explain

    Posted 18 days ago
    Hi Ayat,

    I shouldn't have put the $110,000 in the Actuals column, since truly we don't know what fixed costs were 'actually'.
    But just remember the Flex Budget matches the Volume / quantity of Actuals.
    I think this is a little better chart (to not include the $110,000 in actual, fixed costs).
    Actual Price
    Variance
    Flex
    Budget
    Volume
    Variance
    Static
    Budget
    QTY Volume same as Flex           121,000
    Variable $60,500
    Fixed     $110,000   $110,000
    Total $178,500 $8000 U $170,500 $5000 F $165,500

    Rebecca

    On Tue, Mar 10, 2020 at 10:17 AM Rebecca McNeely <rebmcneely@...> wrote:
    Good morning, Ayat,

    Here is how I did it and believe the answer is 121,000 hours.
    Actuals Price
    Variance
    Flex Budget Volume
    Variance
    Static Budget
    same as Flex      121,000.00
               
     $    60,500.00
     $  110,000.00    $ 110,000.00    $    110,000.00 Fixed
     $  178,500.00  8000 U   $ 170,500.00  5000 F   $    165,500.00

    The only thing the flex budget equals to actuals is Quantity.  I got the total bottom line Flex Budget total of $170,500 using the price and volume variances. Since there is an Unfavorable price amount of $8000, the flex budget total must be $170,500.  Deduct the fixed of $110,000 to get $60,500.  $60,500 / .50 per hour = 121,000 hours.

      Let me know if you have questions.  
    Thanks,
    Rebecca


    --
    **
    Rebecca