Question

Lewis Co. reports the following results for May. Prepare a flexible budget report showing variances between budgeted and actual results. Budgeted Actual Sales $ 1,300 per unit $ 2,126,000 Variable expenses $ 520 per unit $ 863,000 Fixed expenses (total) $ 155,000 $ 142,000 Units produced and sold 1,400 1,600 List variable and fixed expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance)

Answer 1

Step-by-step explanation:

Variance

Sales 420,000 435,000 15,000 Favourable

Variable expenses 168,000 172,000 4,000 Unfavorable

Contribution margin 252,000 263,000 11,000 Favourable

Fixed expenses 125,000 122,000 3,000 Unfavorable

Income 127,000 141,000 14,000 Favourable