Solitaire Company’s fixed budget performance report for June follows. The $315,000 budgeted expenses include $294,000 variable expenses and $21,000 fixed expenses. Actual expenses include $27,000 fixed expenses. Prepare a flexible budget performance report showing any variances between budgeted and actual results. List fixed and variable expenses separately.
Fixed Budget Actual Results Variances
Sales (in units) 8,400 10,800
Sales (in dollars) $420,000 $540,000 $120,000 F
Total expenses 315,000 378,000 63,000 U
Income from operations $105,000 $162,000 $57,000 F
The income from operations is $21,000 (Favorable).
In accounting, income from operations or operating income denotes the revenues generated from the primary activities of a business concern. It generally includes the sale and purchase of goods or services.
|Particulars||Flexible Budget||Actual Results||Variances|
|Less: Variable expenses||378,000||351,000||27,000 (F)|
|Contribution margin||162,000||189,000||27,000 (F)|
|Less: Fixed expenses||21,000||27,000||6,000 (U)|
|Income from operations||141,000||162,000||162,000|
In a recent year, BMW sold 182,158 of its 1 Series cars. Assume the company expected to sell 191,158 of these cars during the year. Also assume the budgeted sales price for each car was $30,000 and the actual sales price for each car was $30,200. Compute the sales price variance and the sales volume variance.
Fogel Co. expects to produce 116,000 units for the year. The company’s flexible budget for 116,000 units of production shows variable overhead costs of $162,400 and fixed overhead costs of $124,000. For the year, the company incurred actual overhead costs of $262,800 while producing 110,000 units. Compute the controllable overhead variance and classify it as favorable or unfavorable.
Frontera Company’s output for the current period results in a $20,000 unfavorable direct labor rate variance and a $10,000 unfavorable direct labor efficiency variance. Production for the current period was assigned a $400,000 standard direct labor cost. What is the actual total direct labor cost for the current period?
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