Actual Results Flexible Budget Variance (F or U) % Variance (F or U) Flexible Harris-Subunit x Budget Direct Materials $ 28,000 $ 25,900 Direct Labor 13,000 13,800 Indirect Labor 26,400 23, 100 Utilities 12,300 11,300 Depreciation 25,000 25,000 Repairs and Maintenance 4,600 5,600 Total $ 109,300 $ 104,700
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Using responsibility reports to evaluate cost, revenue, and profit centers
One subunit of Harris Sports Company had the following financial results last month:
Requirements
- Complete the performance evaluation report for this subunit Enter the variance percent as a percentage of the budgeted amount rounded to two decimal places.
- Based on the data presented, what type of responsibility center is this subunit?
- Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $2,500 or 10%?
- Should only unfavorable variances be investigated? Explain.
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