TCO C) Nic Saybin Enterprises Accounting Department collects all pertinent month
ID: 2387881 • Letter: T
Question
TCO C) Nic Saybin Enterprises Accounting Department collects all pertinent monthly operating data. Selected data is presented below for the current month. From the data provided, please provide Saybin Enterprises Management with a flexible budget analysis to see how costs were controlled.Actual Costs Incurred Static Budget
Activity Level (in units) 754,009 746,500
Variable Costs:
Indirect Materials $328,897 $325,640
Utilities $174,332 $171,890
Fixed Costs:
General & Administrative $237,985 $244,908
Rent $135,500 $135,000
Explanation / Answer
Actual Cost Static Budget Budget per unit Flexible Budget Variance A B C D A - D Activity Level 754009 746500 Variable Cost Indirect Material 328897 325640 0.44 328915.59 -18.59 Note : Actual Activity Level * Budget per unit Utilities 174332 171890 0.23 173619.03 712.97 Note : Actual Activity Level * Budget per unit Fixed cost General and Administrative 237985 244908 244908 -6923.00 Same as static budget , as Fixed cost not to change with Activty level Rent 135500 135500 135500 0.00 Same as static budget , as Fixed cost not to change with Activty level By analysing the variance with flexible budget , it can be seen that variable cost is in line with the budget and Fixed Cost of General and Administrative epenses is less than the flexible budget and hence the costs are controlled
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