Bidoof Books, Inc. is a major bookseller for four nearby colleges. The income statement for the quarter of the year is presented below: Bidoof Books, Inc Income Statement For the quarter ended September 30, 2021 Sales ₱ 800,000 Less: Cost of Goods Sold 560,000 Gross Margin ₱ 240,000 Less: Operating Expenses Less: Selling Expenses ₱ 100,000 Less: Administrative Expenses 110,000 210,000 Net Operating Income ₱ 30,000 On average, a book sells for ₱400. Cost of goods sold is entirely variable. Unit variable selling expenses are ₱30 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed. The TOTAL FIXED COSTS for September 2021 amount to ₱________________.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Bidoof Books, Inc. is a major bookseller for four nearby colleges. The income statement for the quarter of the year is presented below:
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Bidoof Books, Inc |
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Income Statement |
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For the quarter ended September 30, 2021 |
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Sales |
₱ 800,000 |
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Less: Cost of Goods Sold |
560,000 |
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Gross Margin |
₱ 240,000 |
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Less: Operating Expenses |
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Less: Selling Expenses |
₱ 100,000 |
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Less: Administrative Expenses |
110,000 |
210,000 |
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Net Operating Income |
₱ 30,000 |
On average, a book sells for ₱400. Cost of goods sold is entirely variable. Unit variable selling expenses are ₱30 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed.
The TOTAL FIXED COSTS for September 2021 amount to ₱________________.
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