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Monday, 9 February 2015

Bay City Company’s fixed budget performance report for July follows. The $587,000 budgeted expenses include $400,000 variable expenses and $187,000 fixed expenses. Actual expenses include $177,000 fixed expenses.

Bay City Company’s fixed budget performance report for July follows. The $587,000 budgeted expenses include $400,000 variable expenses and $187,000 fixed expenses. Actual expenses include $177,000 fixed expenses.
 
  Fixed Budget Actual Results Variances
  Sales (in units)   8,000     6,900      
  



 



     
  Sales (in dollars) $ 640,000   $ 607,200   $ 32,800  U
  Total expenses   587,000     551,000     36,000  F
  

 

 

  Income from operations $ 53,000   $ 56,200   $ 3,200  U
  



 



 




 
Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately. (Do not round intermediate calculations.)
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Explanation:
  Supporting computations    
  Total fixed budget sales $ 640,000  
  Total units budgeted ÷ 8,000  
  

  Budgeted selling price (per unit) $ 80  
  Flexible budget units × 6,900  
  

  Flexible budget sales $ 552,000  
    



  Total fixed budget variable expenses $ 400,000  
  Total units budgeted ÷ 8,000  
  

  Budgeted variable expenses (per unit) $ 50.00  
  Flexible budget units × 6,900  
  

  Flexible budget variable expenses $ 345,000  
  



  Total actual expenses $ 551,000  
  Less actual fixed expenses   177,000  
  

  Total actual variable expenses $ 374,000  
  



Solitaire Company’s fixed budget performance report for June follows. The $615,000 budgeted expenses include $578,100 variable expenses and $36,900 fixed expenses. Actual expenses include $48,900 fixed expenses.

Solitaire Company’s fixed budget performance report for June follows. The $615,000 budgeted expenses include $578,100 variable expenses and $36,900 fixed expenses. Actual expenses include $48,900 fixed expenses.
 
  Fixed Budget Actual Results Variances
  Sales (in units)   8,200     10,600      
  



 



     
  Sales (in dollars) $ 820,000   $ 1,060,000   $ 240,000  F
  Total expenses   615,000     738,000     123,000  U
  

 

 

  Income from operations $ 205,000   $ 322,000   $ 117,000  F
  



 



 





Prepare a flexible budget performance report showing any variances between budgeted and actual results. List fixed and variable expenses separately. (Do not round intermediate calculations.)
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Explanation:

 

 

Tempo Company's fixed budget for the first quarter of calendar year 2013 reveals the following.

Tempo Company's fixed budget for the first quarter of calendar year 2013 reveals the following.
 
                    
  Sales (12,000 units)           $ 2,424,000  
  Cost of goods sold                
       Direct materials   $ 276,600          
       Direct labor     515,280          
       Production supplies     318,360          
       Plant manager salary     76,600       1,186,840  
    

   

 
  Gross profit             1,237,160  
  Selling expenses                
       Sales commissions     105,600          
       Packaging     184,080          
       Advertising     100,000       389,680  
    

         
  Administrative expenses                
       Administrative salaries     126,600          
       Depreciation—office equip.     96,600          
       Insurance     66,600          
       Office rent     76,600       366,400  
    

   

 
  Income from operations           $ 481,080  
            



 

 
Prepare flexible budgets that show variable costs per unit, fixed costs, and three different flexible budgets for sales volumes of 10,000, 12,000, and 14,000 units. (Round cost per unit to 2 decimal places.)
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Explanation: