Question

Lewis Co. reports the following results for May. Prepare a flexible budget report showing variances between budgeted and actual results.

Budgeted Actual
Sales 950 per unit $1,470,000
Variable expenses 380 per unit 588,000
Fixed expenses (total) $144,500 135000
Units produced and sold 1,530 1,330
List variable and fixed expenses separately.

Answer 1

See below

Step-by-step explanation:

Variance

Sales $1,263,500 $1,470,000 $206,500 Favourable

Less:

Variable expenses ($505,400) ($588,000) $82,600 Unfavorable

Contribution $758,100 $882,000 $123,900 Favourable

Less:

Fixed cost ($144,500) ($135,000) Favourable

Income(loss) $613,600 $747,000 $133,400 Unfavourable