Score: 0.57 of 8 pts 4 of 4 (4 complete) HW Score: 69.18%, 20.75 of 30 pts E10-2

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Score: 0.57 of 8 pts 4 of 4 (4 complete) HW Score: 69.18%, 20.75 of 30 pts E10-26A (similar to) Question Help Organic Muffins sells its muffins to restaurants and coffee houses for an average selling price of $35 per case. The following information relates to the budget for Organic Muffins for this year (all figures are annual totals unless otherwise noted) Requirement Construct a flexible budget performance report for Organic Muffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U). (Enter the variances as positive numbers. If the variance is 0, make sure to enter in a "O". Label each variance as favorable (F) or unfavorable (U).) (Click the icon to view the budget information.) During the year, Organic Muffins actually sold 9,200 cases, resulting in total sales revenue of $330,000. Actual expenses (in total) from this year are as follows (Click the icon to view the actual expenses.) Organic Muffins Flexible Budget Performance Report-Sales and Operating Expenses For the Year Ended December 31 Flexible Flexible Budget Variance Master Budget 8,500 cases Actual Budget Volume 9,200 cases 9,200 casesVariance Sales revenue $ 330.000 8,000 E S 322,000 $ 24,500 E S 297,500 ($35 per case) Variable operating expenses 46300 30200 13200 pense ($5 per case sold) 300 Packaging ex Shipping expense ($3 per case sold) Sales commissions (4% of sales price) Data Table Data Table Budgeted sales in cases Packaging cost per case . Shipping expense per case . . Sales commission expense . . . . . Salaries expense Office rent 8,500 cases $46,300 Shipping expense 4% of sales price $ 6,900 $ 3,300 $ 2,500 $ 2,400 $ 1,200 $ 8,500 3,300 2,500 1,900 $ 1,600 Office rent. Office supplies expense Office supplies expense PrintDone Print Done Choose from any list or enter any number in the input fields and then click Check Answer. Clear AlI Check Answer remaining

Explanation / Answer

For flexible budget variance found the difference between actual and flexible budget amounts, if actual budget expenses are more than flexible than it is unfavorable variance and if it is less than flexible budget , then favourable variance. Opposite in case of revenue.

For volume variance found the difference between master budget and flexible budget amounts, if flexible budget expenses are more than master than it is unfavorable variance and if it is less than master budget , then favourable variance. Opposite in case of revenue

Actual

9200 cases

flexible budget

9200 cases

master budget

8500 cases

$46,000

(9200×$5)

$42,500

(8500×$5)

$30,200

$2,600 U

$27,600

(9200×$3)

$21,00 U

$25,500

(8500×$3)

$12,880

(322000×4%)

$980 U

$11,900

(297500×4%)

Actual

9200 cases

Flexible budget variance

flexible budget

9200 cases

volume variance

master budget

8500 cases

Sales revenue ($35 per case) $330,000 $8,000 F $322,000 $24,500 F $297,500 Variable operating expenses: Packaging expense ($5 per case sold) $46,300 $300 U

$46,000

(9200×$5)

$3500 U

$42,500

(8500×$5)

Shipping expense ($3 per case sold)

$30,200

$2,600 U

$27,600

(9200×$3)

$21,00 U

$25,500

(8500×$3)

Sales commission (4% of sales price) $13,200 $320 U

$12,880

(322000×4%)

$980 U

$11,900

(297500×4%)

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