Solitaire Company’s fixed budget performance report for June follows. The $315,0

Question

Solitaire Company’s fixed budget performance report for June follows. The $315,000 budgeted expenses include $260,400 variable expenses and $54,600 fixed expenses. Actual expenses include $61,400 fixed expenses.

Prepare a flexible budget performance report showing any variances between budgeted and actual results. List fixed and variable expenses separately.

Fixed Budget Actual Results Variances Sales (in units) 8,400 10,800 Sales (in dollars) $ 420,000 $ 540,000 $ 120,000 F Total expenses 315,000 378,000 63,000 U Income from operations $ 105,000 $ 162,000 $ 57,000 F

Explanation / Answer

flexible budget performance report

for the month ended june 30.

note:

expense will be favorable if actual is less than flexible budget.

income will be favorable if actual is greater than flexible budget.

(working for flexible budget in brackets) flexible budget actual results variances favorable / unfavorable sales (420,000/8400*10,800) $540,000 540,000 nil no variance variable expenses(260,400/8400*10,800) 334,800 316,600 18,200 favorable contribution margin 205,200 223,400 18,200 favorable fixed expenses 54,600 61,400 6,800 unfavorable income from operations 150,600 162,000 11,400 favorable

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