Question

Flexible Budgets, Direct Cost Variances, and Management Control Flexible Budget Sweeney Enterprises manufactures tires for the Formula i motor racing circuit. The company's budgeted and 4 actual amounts are as follows: Budgeted for August 2017 Units to manufacture and sell Variable cost per tire Total fixed costs Budgeted selling price per tire 3,600 $71 $55,000 $114 varebone Actual Results for August 2017 Units manufactured and sold 3,500 Selling price per tire $116 Total variable costs $280,000 Total fixed costs. $51,000 8 Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instruction tab you will be marked wrong. Requirement Prepare a performance report that uses a flexible budget and a static budget. Enter all amounts as positive values. Do NOT use parentheses or a minus sign for amounts to be subtracted. Use the ABS function when calculating variances, and use the drop-down selections for F (favorable) or U (unfavorable) when describing the variances. For variances with a zero amount, make sure to enter the result of "=0" in the appropriate cell and leave the drop-down to identify the variance as either For U blank Saving & Submitting Solution 1 Save file to desktop. a. Create folder on desktop, and label COMPLETED EXCEL PROJECTS b. Save your solution in the folder you just created; add-solution-date to end of file name 2 Upload and submit your file to be graded. Navigate back to the activity window - screen where you downloaded the initial spreadsheet Click Choose button under step 3; locate the file you just saved and click Open c. Click Upload button under step 3 d. Click Submit button under step 4

Answer 1

Solution:

	Actual Results (1)	Flexible - Budget Variance (2) = (3) - (2)		Flexible Budget (3)	Sales - Volume Variance (4) = (5) - (3)		Static Budget
Units Sold	3500	0		3500	100	U	3600
Revenues	406000	7000	F	399000	11400	U	410400
Variable Costs	280000	31500	U	248500	7100	F	255600
Contribution Margin	126000	24500	U	150500	4300	U	154800
Fixed Costs	51000	4000	F	55000	0		55000
Operating Income	75000	20500	U	95500	4300	U	99800
Total Flexible Budget Variance	20500	U
Total Sales Volume Variance	4300	U
Total Static Budget Variance	24800	U

Input Data	Actual	Budgeted
Units	3500	3600
Selling Price	116	114
Variable Costs	80	71
Fixed Costs	51000	55000