Question

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.

Answer 1

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: