142k views
5 votes
Required: 2.Complete the flexible budget performance report for the school for July. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.

User Gligor
by
7.9k points

1 Answer

5 votes

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:

User Rambod
by
7.2k points