The following information was drawn from the accounting records of Smith Company

Static
Budget

Flexible
Budget

Actual
Results

Sales

$ 10,000

$ 12,000

$ 12,700

Cost of Goods Sold

(6,000)

(7,200)

(6,900)

Gross Margin

4,000

4,800

5,800

Variable Cost

(2,000)

(2,400)

(2,600)

Fixed Cost

(1,000)

(1,000)

(1,300)

Net Income

$ 1,000

$ 1,400

$ 1,900

Based on this information the

a. variable operating cost volume variance is a $400 favorable variance.

b. variable operating cost flexible budget variance is a $200 unfavorable variance.

c. variable operating cost volume variance is a $200 favorable variance.

d. variable operating cost flexible budget variance is a $400 favorable variance.

Joint cost cheyenne, inc. produces three products from a common input. the joint costs for a typical quarter follow: direct materials $45,000 direct labor 55,000 overhead 60,000 the revenues from each product are as follows: product a $75,000 product b 80,000 product c 30,000 management is considering processing product a beyond the split-off point, which would increase the sales value of product a to $116,000. however, to process product a further means that the company must rent some special equipment costing $17,500 per quarter. additional materials and labor also needed would cost $12,650 per quarter. a. what is the gross profit currently being earned by the three products for one quarter? $answer b. what is the effect on quarterly profits if the company decides to process product a further? $answer