Question

Sutherland Company manufactures book bags and has provided the following information for June 2018 Click the icon to view the information) Requirements 1. Prepare a flexible budget performance report (Hint. You will need to calculate the flexible budget amounts for 7,000 units) 2. As the company owner, which employees would you praise or criticize after you analyze this performance report? Flexible Budget Performance Report For the Month Ended June 30, 2018 2 3 5 (1)-(3) Budget Flexible Sales Amounts Actual Budget Flexible Volume Static Per Unit Results Variance Budget Variance Budget Units 1 Salos Revenue Variable Expenses Contribution Margin Fred Expenses Operating Income Choose from any list or enter any number in the input fields and then click Check Answer parts emaining Clear All Check Answer O ii e a . > hp) prt sc & 4 5 6 7 8 9 0

Answer 1

FLEXIBLE BUDGET PERFORMANCE REPORT FOR THE MONTH ENDED JUNE 30,2018
	Budget amount per unit	Actual results [1]	Flexible budget variance [1-2]	Flexible budget [2]	sales volume variance [3-2]	Static budget [3]
Units		7000		7000		8000
Sales revenue	96000/8000=12	87500	3500 U	7000*12=84000	12000 U	96000
Variable expense	64000/8000=8	57400	1400 U	7000*8=56000	8000 F	64000
Contribution margin		30100	2100U	28000	4000 U	32000
Fixed expenses		19000	1000 F	20000	0 None	20000
operating income		11100	3100 U	8000	4000 U	12000

Note:

If actual revenue is greater than flexible budget revenue ,variance is favorable and vise versa.

If static budget is greater than flexible budget revenue ,variance is unfavorable and vise versa.

If actual expenses is greater than flexible budget expenses ,,variance is unfavorable and vise versa.

If static budget expense is greater than flexible budget expenses ,variance is favorable and vise versa.