09 Apr Question – Cherokee Manufacturing
Question – Cherokee Manufacturing Company established the following standard price and cost data:
Sales price$12.00per unitVariable manufacturing cost$7.20per unitFixed manufacturing cost$3,600totalFixed selling and administrative cost$1,200total
Cherokee planned to produce and sell 2,000 units. Actual production and sales amounted to 2,200 units.
1. Determine the sales and variable cost volume variances.
2. Classify the variances as favorable (F) or unfavorable (U).
3. Determine the amount of fixed cost that will appear in the flexible budget.
4. Determine the fixed cost per unit based on planned activity and the fixed cost per unit based on actual activity.