Data Actual Flexible Budget Flexible Sales-Volume Results Variance (2) Budget Variances Static Budget (1) = (1) - (3) (3) (4)=(3)-(5) (5) 12.000 14,000 Units sold Revenue (sales) Variable costs 1,260,000 Direct materials 621,600 Direct manufacturing labor 198,000 Variable manufacturing overhead 130,500 Total variable costs 950,100 Contribution margin 309,900 Fixed costs 285,000 Operating income 24,900 о 1,442,000 720,000 192,000 144,000 1,056,000 386,000 276,000 110,000 Requirement: Using the data above, prepare the flexible budget and relevant variances Steps to develop a flexible budget 1. Identify the actual quantity of output - use that for the flexible budget. 2. Calculate the flexible budget for revenues based on the budgeted selling price and actual quantity of output. 3. Calculate the flexible budget variable costs based on the budgeted variable cost per output unit, actual quantity of output. 4. Calculate the flexible budget fixed costs based on budgeted fixed costs.

Data Actual Flexible Budget Flexible Sales-Volume Results Variance (2) Budget Variances Static Budget (1) = (1) - (3) (3) (4)=(3)-(5) (5) 12.000 14,000 Units sold Revenue (sales) Variable costs 1,260,000 Direct materials 621,600 Direct manufacturing labor 198,000 Variable manufacturing overhead 130,500 Total variable costs 950,100 Contribution margin 309,900 Fixed costs 285,000 Operating income 24,900 о 1,442,000 720,000 192,000 144,000 1,056,000 386,000 276,000 110,000 Requirement: Using the data above, prepare the flexible budget and relevant variances Steps to develop a flexible budget 1. Identify the actual quantity of output - use that for the flexible budget. 2. Calculate the flexible budget for revenues based on the budgeted selling price and actual quantity of output. 3. Calculate the flexible budget variable costs based on the budgeted variable cost per output unit, actual quantity of output. 4. Calculate the flexible budget fixed costs based on budgeted fixed costs.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 8P: Preparing a performance report Use the flexible budget prepared in P7-6 for the 29,000-unit level of...

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