Question

1) Workout Problem - Rekindle Diner provides free meals to the homeles. The badge for las was based on 3.800 meals. The following cost formules are used in the Rainde's Fixed element per month Variable element per mal Groceries so 52.15 Kitchen operations 55,400 $1.85 Administrative expenses $2,000 50.65 Fundraising expenses $1.300 $0.00 The manager has also listed the actual expenses for the month as follows Diner Statement of Expenses For the Month Ended May 31 Actual meals 4,100 Groceries 58.645 Kitchen operations $12.435 Administrative expenses 54.605 Fundraising expenses $1.320 Total expense $27.005 Required: e 25 points) On the next page, prepare a flexible budget performance reporte activity variances and the spending variances for each of the expenses for th May. Label each variance as favorable (F) or unfavorable (Ul. Hint prepare what we did in class for Zippy Airlines)

Answer 1

Flexible budget is a budget prepared with change volume of activities.It is against static budget which remain constant with change in the volume activities. The variance is calculated which is favorable(F) or Unfavorable(U). The budget is prepared with the spending variance and activity variance.

Flexible budget per formance is as follows: particular planning Activity Flexible spending Actual Budget variancer Budget variances Results Meals 3,800 4,100 4100 1 Total Expenses Groceries (s) o 8 170 (U) 8,170 475(0) 8, 645 Kitchen operations 5,400 7030U) 12,4305 ) 12,435 Administrative(s) 2,000 2, 4700 4470 1351U) 4,605 Expenses Fundraising (s) 1, 300 1,300 2010) 1320 expenses Total expenses (s) 8,700 17, 6700 26,370 635(4) 27.005 F = favorable u= unfavorable