Question

Work backward to find missing values (Learning Objective 5)

Newton Industries has a relevant range extending to 31,800 units each month. The following performance report provides information about Newton’s budget and actual performance for April:

Newton Industries Flexible Budget Performance Report: Sales and Operating Expenses For the Month Ended April 30
	Actual	Flexible Budget Variance	Flexible Budget	Volume Variance	Master Budget
Output Units	28,000		?		31,800
Sales revenue	$251,000	$ 60,000 F	?	?	?
Less: variable expenses	201,500	?	?	?	$198,750
Contribution margin	?	?	?	?	?
Less: Fixed expenses	15,000	?	?	?	24,000
Operating income	?	?	?	?	?

Requirement

Fill in all missing numbers in the table. Be sure to label any variances as favorable or unfavorable.

Answer 1

Newton Industries Flexible Budget Performance Report: Sales and Operating Expenses For the Month Ended April 30
	Actual	Flexible Budget Variance	Flexible Budget	Volume Variance	Master Budget
Output Units	28,000		28000		31,800
Sales revenue	$251,000	$ 60,000 F	191000	25921 U	216921
Less: variable expenses	201,500	26500 U	175000	23750 F	$198,750
Contribution margin	49500	33500 F	16000	2171 U	18171
Less: Fixed expenses	15,000	9000 F	24000	0 None	24,000
Operating income	34500	42500 F	-8000	2171 U	-5829