Question

Beech Company produced and sold 107,000 units of its product in May. For the level of production achieved in May, the budgeted amounts were: sales, $1,270,000; variable costs, $835,000; and fixed costs, $220,000. The following actual financial results are available for May. Actual Sales (107,000 units) $ 1,253,000 Variable costs 803,500 Fixed costs 220,000 Prepare a flexible budget performance report for May.

Answer 1

See budget below

Step-by-step explanation:

A flexible budget is that which prepared for the actual activity level achieved using the assumptions of the static budget

Flexible budget

Budget Actual variance

Revenue 1,270,000 1253,000 17000 unfavorable

variable cost ( 835,000) (803,500) 31,500 favorable

Contribution 435000 449500

Fixed cost (220,000) ( 220,000) -

Profit 215,000 229,500 14500 Favorable