Question

Bay City Company’s fixed budget performance report for July follows. The $367,000 budgeted total expenses include $280,000 variable expenses and $87,000 fixed expenses. Actual expenses include $77,000 fixed expenses. Fixed Budget Actual Results Variances Sales (in units) 5,000 3,900 Sales (in dollars) $ 400,000 $ 351,000 $ 49,000 U Total expenses 367,000 329,000 38,000 F Income from operations $ 33,000 $ 22,000 $ 11,000 U Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round your intermediate calculations. Round your final answers to whole dollars.)

Bay City Company's fixed budget performance report for July follows. The $367,000 budgeted total expenses include $280,000 variable expenses and $87,000 fixed expenses. Actual expenses include $77,000 fixed expenses. Fixed Budget Variances Sales (in units) Sales (in dollars) Total expenses Income from operations 5,000 $400,000 367,000 $ 33,000 Actual Results 3,900 $ 351,000 329,000 $ 22,000 $49,000 V 38,000 F $11,000 U Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round your intermediate calculations. Round your final answers to whole dollars.) BAY CITY COMPANY Flexible Budget Performance Report For Month Ended July 31 Flexible budget Actual results Variances Fav./Unf.

Answer 1

BAY CITY COMPANY
Flexible Budget Performance Report
For the month ended July 31
	Flexible Budget	Actual Results	Variances	Fav./Unf.
Sales	$3,12,000	$3,51,000	$39,000	Fav
Variable expenses	$2,18,400	$2,52,000	$33,600	Unf
Contribution margin	$93,600	$99,000	$5,400	Fav
Fixed expenses	$87,000	$77,000	$10,000	Fav
Income from operations	$6,600	$22,000	$15,400	Fav
Sales price per unit =$400,000 / 5,000 units =$80 per unit
Flexible Budgeted sales =3,900 units*$80 =$312,000
Variable expenses per unit =$280,000 / 5,000 units =$56 per unit
Flexible Budgeted Variable expenses =3,900 units*$56 =$218,400