Exercise 21-3 Preparation of a flexible budget performance report LO P1 Solitair

Question

Exercise 21-3 Preparation of a flexible budget performance report LO P1 Solitaire Company's fixed budget performance report for June follows. The $315,000 budgeted expenses include $294,000 variable expenses and $21,000 fixed expenses. Actual expenses include $27,000 fixed expenses Fixed Budget Actual ResultsVariances Sales (in units) 8,400 10,800 Sales (in dollars) Total expenses $420,000 315,000 540,000 $120,000 F 378,000 63,000 U Income from operations $105,000 162,000 $ 57,000 F Prepare a flexible budget performance report showing any variances between budgeted and actual results List fixed and variable expenses separately SOLITAIRE COMPANY Flex ible Budget Performance Report For Month Ended June 30 Flexible Budget Actual ResultsVariances vorable/ Unfavorable 540,000 540,000 $ 378,000 162,000 21,000 41,000 162,000 0[No variance riable expenses Contribution margin Favorable avorable Unfavorable avorable xed expenses Income from operations

Explanation / Answer

Flexible budget performance report :

Flexible budget Actual results Variance Favorable/Unfavorable Sales 540000 540000 0 No variance Variable expense 378000 351000 27000 Favorable Contribution margin 162000 189000 27000 Favorable Fixed expense 21000 27000 6000 Unfavorable Income from operations 141000 162000 21000 Favorable

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