Prepare a flexible budget performance report for the year.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Use the following information for the Problems below. (Algo)
Skip to question
[The following information applies to the questions displayed below.]
Phoenix Company reports the following fixed budget. It is based on an expected production and sales volume of 15,500 units.
| PHOENIX COMPANY | |
| Fixed Budget | |
| For Year Ended December 31 | |
| Sales | $ 3,100,000 |
|---|---|
| Costs | |
| Direct materials | 992,000 |
| Direct labor | 232,500 |
| Sales staff commissions | 62,000 |
| 295,000 | |
| Supervisory salaries | 198,000 |
| Shipping | 217,000 |
| Sales staff salaries (fixed annual amount) | 251,000 |
| Administrative salaries | 498,500 |
| Depreciation—Office equipment | 199,000 |
| Income | $ 155,000 |
Problem 23-2A (Algo) Preparing a flexible budget performance report LO P1
Phoenix Company reports the following actual results. Actual sales were 18,500 units.
| Sales (18,500 units) | $ 3,746,250 |
|---|---|
| Costs | |
| Direct materials | $ 1,198,800 |
| Direct labor | 284,900 |
| Sales staff commissions | 64,750 |
| Depreciation—Machinery | 295,000 |
| Supervisory salaries | 210,000 |
| Shipping | 250,675 |
| Sales staff salaries (fixed annual amount) | 270,000 |
| Administrative salaries | 506,500 |
| Depreciation—Office equipment | 199,000 |
| Income | 466,625 |
Required:
Prepare a flexible budget performance report for the year.
Note: Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "No variance" and enter "0" for zero variance
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
