(SOLVED) Norland Norge AS produces corporate notebooks Each notebook is designed for


Question Description:

$19

Norland-Norge AS produces corporate notebooks. Each notebook is designed for an individual customer. The company’s operating budget for September 2008 included these data:
Number of notebooks…………………………………. 15000
Selling price per book…………………………………. NKr 20
Variable costs per book…………………………………. NKr 8
Total fixed costs for the month NKr……………………. 145000
The actual results for September 2008 were:
Number of notebooks produced and sold……………….. 12 000
Average selling price per book…………………………… NKr 21
Variable costs per book…………………………………… NKr 7
Total fixed costs for the month NKr……………………… 150000
The managing director of the company observed that the operating profit for September was much less than anticipated, despite a higher-than-budgeted selling price and a lowerthan- budgeted variable cost per unit. You have been asked to provide explanations for the disappointing September results. Norland-Norge develops its flexible budget on the basis of budgeted revenue per output unit and variable costs per output without a detailed analysis of budgeted inputs.
Required
1. Prepare a Level 1 analysis of the September performance.
2. Prepare a Level 2 analysis of the September performance.
3. Why might Norland-Norge find the Level 2 analysis more informative than the Level 1 analysis? Explain your answer.

Answer

$19