Question

Brodrick Company expects to produce 21,000 units for the year ending December 31. A flexible budget for 21,000 units of production reflects sales of $504,000; variable costs of $63,000; and fixed costs of $141,000. Assume that actual sales for the year are $595,600 (26,900 units), actual variable costs for the year are $114,000, and actual fixed costs for the year are $133,000. Prepare a flexible budget performance report for the year.

Answer 1

Brodrick Company

Flexible Budget Performance Report for the year ended December 31

Flexible Actual Variance

Budget Budget

Sales unit 21,000 26,900 5,900 units F

Sales revenue $645,600 $595,600 $50,000 U

Variable costs 80,700 114,000 33,300 U

Fixed costs 141,000 133,000 8,000 F

Total costs $221,700 $247,000 $25,300 U

Profit $423,900 $348,600 $75,300 U

Step-by-step explanation:

a) Data and Calculations:

Flexible Budget for 21,000 units

Sales revenue = $504,000

Variable cost = $63,000

Fixed costs = $141,000

Flexing the budget with 26,900 units:

Sales revenue = $645,600 ($504,000/21,000 * 26,900)

Variable costs = $80,700 ($63,000/21,000 * 26,900)