Question

10.7

Hampton Muffins sells its muffins to restaurants and coffee houses for an average selling price of $32 per case. The following information relates to the budget for Hampton Muffins for this year (all figures are annual totals unless otherwise noted): (Click the icon to view the budget information.) During the year, Hampton Muffins actually sold 8,600 cases, resulting in total sales revenue of $282,600. Actual expenses in total) from this year are as follows: (Click the icon to view the actual expenses.) Requirement Construct a flexible budget performance report for Hampton Muffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U). (Enter the variances as positive numbers. Label each variance as favorable (F) or unfavorable (U). If the variance is 0, make sure to enter in a "O". A variance of zero is considered favorable.) Flexible Budget Performance Report - Sales and Operating Expenses For the Year Ended December 31 Actual 8,600 cases Flexible Budget Variance Flexible Budget 8,600 cases Volume Variance Master Budget 8,200 cases FM Sales revenue (532 per case) Variable operating expenses: Packaging expense ($1 per case sold) Shipping expense (52 per case sold) Sales commissions (4% of sales price) Fixed operating expenses: Salaries Office rent Depreciation Insurance expense Office Supplies expense Total operating expenses 9 Budgeted sales in cases ........ Packaging cost per case......... Shipping expense per case...... Sales commission expense Salaries expense.......... Office rent................ Depreciation. Insurance expense ............ Office supplies expense 8,200 cases S 1 $ 5 3% of sales price $ 6,500 $ 4,000 $ 3,300 $ 2,300 $ 1,200 Packaging cost...................$ Shipping expense Sales commission expense....... Salaries expense. Office rent.............. 9,800 45,900 8,478 7,800 4,000 3,300 1,600 1,500 9 Depreciation....... Insurance expense......... Office supplies expense 9

Answer 1

Flexible budget performance report

	Actual 8600 cases	flexible budget variance (F/U)	flexible budget 8600 cases	volume variance (F/U)	master budget 8200 cases
Sales revenue	282600	7400F	275200	12800F	262400
Variable operating expenses
Packing expenses	9800	1200U	8600	400U	8200
Shipping expenses	45900	2900U	43000	2000U	41000
Sales commission	8478	222U	8256	384U	7872
Fixed operating expenses
Salaries	7800	1300U	6500		6500
Office rent	4000		4000		4000
Depreciation	3300		3300		3300
Insurance expenses	1600	700F	2300		2300
Office supplies expenses	1500	300U	1200		1200
Total operating expenses	82378	5222U	77156	2784U	74372
Operating income/(loss)	200222	2178F	198044	10016F	188028