Answer: Sure, here is the flexible budget performance report for the school for July:
Flexible Budget Performance Report
For the Month Ended July 31, 2023
Actual Results
Flexible Budget
Variance
(Favorable or Unfavorable)
Sales (units) 10,000 10,000 None
Sales revenue $500,000 $500,000 None
Variable costs:
Cost of goods sold $250,000 $250,000 None
Selling expenses $75,000 $70,000 F $5,000
Administrative expenses $50,000 $52,500 U $2,500
Fixed costs:
Rent $20,000 $20,000 None
Depreciation $10,000 $10,000 None
Other fixed costs $10,000 $10,000 None
Total costs $405,000 $392,500 F $12,500
Net operating income $85,000 $107,500 F $22,500
Explanation of Variances:
* Sales revenue was $500,000, which was equal to the flexible budget.
* Variable costs were $5,000 less than the flexible budget due to a decrease in selling expenses.
* Fixed costs were $12,500 less than the flexible budget due to a decrease in other fixed costs.
As a result of the favorable variances, net operating income was $22,500 higher than the flexible budget.
Step-by-step explanation: