Question

Bay City Company’s fixed budget performance report for July follows. The $367,000 budgeted total expenses include $280,000 variable expenses and $87,000 fixed expenses. Actual expenses include $77,000 fixed expenses. Fixed Budget Actual Results Variances Sales (in units) 5,000 3,900 Sales (in dollars) $ 400,000 $ 347,100 $ 52,900 U Total expenses 367,000 334,000 33,000 F Income from operations $ 33,000 $ 13,100 $ 19,900 U Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round your intermediate calculations. Round your final answers to whole dollars.)

Answer 1

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Step-by-step explanation:

BAY CITY COMPANY

Flexible Budget Performance Report

For the month ended July 31

Flexible Budget Actual Results Variances Fav./Unf.

Sales $3,12,000 $3,51,000 $39,000 Fav

Variable expenses $2,18,400 $2,52,000 $33,600 Unf

Contribution margin $93,600 $99,000 $5,400 Fav

Fixed expenses $87,000 $77,000 $10,000 Fav

Income from

operations $6,600 $22,000 $15,400 Fav

Sales price per unit =$400,000 / 5,000 units =$80 per unit

Flexible Budgeted sales =3,900 units*$80 =$312,000

Variable expenses per unit =$280,000 / 5,000 units =$56 per unit

Flexible Budgeted Variable expenses =3,900 units*$56 =$218,400