Bay City Company’s fixed budget performance report for July follows. The $587,000 budgeted total expenses include $400,000 variable expenses and $187,000 fixed expenses. Actual expenses include $177,000 fixed expenses. Fixed Budget Actual Results Variances Sales (in units) 8,000 6,900 Sales (in dollars) $ 640,000 $ 614,100 $ 25,900 U Total expenses 587,000 550,000 37,000 F Income from operations $ 53,000 $ 64,100 $ 11,100 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.)
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.
Bay City Company’s fixed budget performance report for July follows. The $587,000 budgeted total expenses include $400,000 variable expenses and $187,000 fixed expenses. Actual expenses include $177,000 fixed expenses.
| Fixed Budget | Actual Results | Variances | |||||||
| Sales (in units) | 8,000 | 6,900 | |||||||
| Sales (in dollars) | $ | 640,000 | $ | 614,100 | $ | 25,900 | U | ||
| Total expenses | 587,000 | 550,000 | 37,000 | F | |||||
| Income from operations | $ | 53,000 | $ | 64,100 | $ | 11,100 | 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.)
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