Complete the flexible budget variance analysis by filling in the blanks in the partial flexible budget performance report for 10,000 travel locks for Gavin, Inc. ## Flexible Budget Performance AnalysisComplete the flexible budget variance analysis by filling in the blanks in the partial flexible budget performance report for 10,000 travel locks for Gavin, Inc.### Gavin, Inc.**Flexible Budget Performance Report (Partial)** *For the Month Ended April 30, 2024*| | Actual Results | Flexible Budget Variance | Flexible Budget ||-------------------------|----------------|--------------------------|-----------------|| Units | 10,000 | (a) | 10,000 || Sales Revenue | $170,000 | (e) | $150,000 || Variable Costs | $51,800 | (f) | $50,100 || Contribution Margin | $118,200 | (g) | $99,900 || Fixed Costs | $15,600 | (h) | $15,100 || Operating Income | $102,600 | (i) | $84,800 |### Explanation- **Units:** The actual and flexible budget units are both 10,000.- **Sales Revenue:** The actual sales revenue is $170,000 compared to a flexible budget of $150,000, leading to a variance.- **Variable Costs:** The actual variable costs are $51,800, while the flexible budget is $50,100.- **Contribution Margin:** Calculated from sales revenue minus variable costs.- **Fixed Costs:** Fixed costs are slightly higher in actual results compared to the budget.- **Operating Income:** The actual operating income is $102,600, which is higher than the budgeted $84,800.Understanding these components of the flexible budget can aid in determining areas of strength and opportunities for financial improvement within the company.

In case of revenue if actual results is more than budgeted then it results in favourable variance.…

Answered: Complete the flexible budget variance…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Complete the flexible budget variance analysis by filling in the blanks in the partial flexible budget performance report for 10,000 travel locks for Gavin, Inc.

## Flexible Budget Performance Analysis

Complete the flexible budget variance analysis by filling in the blanks in the partial flexible budget performance report for 10,000 travel locks for Gavin, Inc.

### Gavin, Inc.
**Flexible Budget Performance Report (Partial)**
*For the Month Ended April 30, 2024*

| | Actual Results | Flexible Budget Variance | Flexible Budget |
|-------------------------|----------------|--------------------------|-----------------|
| Units | 10,000 | (a) | 10,000 |
| Sales Revenue | $170,000 | (e) | $150,000 |
| Variable Costs | $51,800 | (f) | $50,100 |
| Contribution Margin | $118,200 | (g) | $99,900 |
| Fixed Costs | $15,600 | (h) | $15,100 |
| Operating Income | $102,600 | (i) | $84,800 |

### Explanation
- **Units:** The actual and flexible budget units are both 10,000.
- **Sales Revenue:** The actual sales revenue is $170,000 compared to a flexible budget of $150,000, leading to a variance.
- **Variable Costs:** The actual variable costs are $51,800, while the flexible budget is $50,100.
- **Contribution Margin:** Calculated from sales revenue minus variable costs.
- **Fixed Costs:** Fixed costs are slightly higher in actual results compared to the budget.
- **Operating Income:** The actual operating income is $102,600, which is higher than the budgeted $84,800.

Understanding these components of the flexible budget can aid in determining areas of strength and opportunities for financial improvement within the company.

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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