Question

Check my work TB Problem Qu. 9-389 Bickel Corporation uses customers served as... Bickel Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of November: Bickel Corporation Comparison of Actual Results to Planning Budget For the Month Ended November 30 Actual Planning Budget 34,000 Variances Results Customers served Revenue ($3.50q) Expenses: Wages and salaries ($23,400 + $1.24q) Supplies ($0.64q) Insurance ($5,300) Miscellaneous expense ($4,300 + $0.33q) 35,000 $122,100 $119,000 $3,100 F 65,560 21,760 5,300 15,520 108,140 $ 10,860 66,800 19,560 5,300 1,240 U 2,200 F 0 None 13,320 104,980 2,200 F Total expense 3,160 F $ 17,120 $6,760 F Net operating income Required: Prepare the company's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U) (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Answer 1

Ans.	BICKEL CORPORATION
	Flexible Budget Performance Report
	For the Month Ended November 30
		Actual Results	Revenue & Spending variance		Flexible Budget	Activity variance		Planning Budget
	Customers served	35,000			35,000			34,000
	Revenue	$122,100	$400	U	$122,500	$3,500	F	$119,000
	Expenses:
	Wages and salaries	$66,800	$0	none	$66,800	$1,240	U	$65,560
	Supplies	$19,560	$2,840	F	$22,400	$640	U	$21,760
	Insurance	$5,300	$0	none	$5,300	$0	none	$5,300
	Miscellaneous expense	$13,320	$2,530	F	$15,850	$330	U	$15,520
	Total expenses	$104,980	$5,370	F	$110,350	$2,210	U	$108,140
	Net operating income	$17,120	$4,970	F	$12,150	$1,290	F	$10,860
	*Flexible budget is prepared on the basis of actual units.
	*Fixed expenses remain same as planning budget.
	*Calculation of Flexible & Planning budget:
		Flexible Budget
	Customers served	35,000
	Revenue	$3.50 * 35,000
	Expenses:
	Wages and salaries	$23,400 + (35,000 * $1.24)
	Supplies	$0.64 * 35,000
	Insurance	$5,300
	Miscellaneous expense	$4,300 + (35,000 * $0.33)
	Revenue & Spending variance   =   Actual results - Flexible budget
	Activity variance =   Flexible budget - Planning budget
	*Increase in revenue or net operating income from planning budget to flexible budget and flexible budget to actual results =   Favorable.
	*Decrease in revenue or net operating income from planning budget to flexible budget and flexible budget to actual results =   Unfavorable.
	*Increase in expenses from flexible budget to actual results & Planning budget to flexible budget =   Unfavorable.
	*Decrease in expenses from flexible budget to actual results & Planning budget to flexible budget =   Favorable.