Question

Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $271,000. During June, the company produced and sold 10,900 units and incurred actual variable costs of $352,000 and actual fixed costs of $286,000. Actual sales for June were $895,000. Prepare a flexible budget report showing variances between budgeted and actual results. List variable and fixed expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance)

Answer 1

Income 219,500 256,000 36,500 Favourable

Step-by-step explanation:

Flexible Budget report showing variances between budgeted and actual results.

Flexible Actual Variance

Sales 872,000 894,000 22,000 Favourable

Variable expenses 381,500 352,000 29,500 Unfavorable

Contribution margin 490,500 542,000 51,500 Favourable

Fixed expenses 271,000 286,000 15000 Unfavorable

Income 219,500 256,000 36,500 Favourable

Sales $80×$10,900=$872,000

Variable $35×$10,900=$381,500