Rocky Mountain incorporated has a budget department that analyzes variances from

Question

Rocky Mountain incorporated has a budget department that analyzes variances from it's budgeted data. The data from the current month is presented below. From the data provided, please provide Rocky's executive team with a flexible budget report that shows pending variances. (Note: Activity Variances are not required.)

Actual Costs Incurred

Planning Budget

Activity level (in units)

5,250

5,178

Variable costs:

     Indirect materials

$24,182

$23,476

     Utilities

$22,356

$22,674

Fixed costs:

     Administration

$63,450

$65,500

     Rent

$65,317

$63,904

Actual Costs Incurred

Planning Budget

Activity level (in units)

5,250

5,178

Variable costs:

     Indirect materials

$24,182

$23,476

     Utilities

$22,356

$22,674

Fixed costs:

     Administration

$63,450

$65,500

     Rent

$65,317

$63,904

Explanation / Answer

Actual Flexible budget Variances Activity level (in units) 5250 5250 Variable costs:      Indirect materials 24182 23802 380 Unfavorable      Utilities 22356 22989 633 Favorable Total Variable costs 46538 46791 253 Favorable Fixed costs:      Administration 63450 65500 2050 Favorable      Rent 65317 63904 1413 Unfavorable Total Fixed costs 128767 129404 637 Favorable Total costs 175305 176195 890 Favorable

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