Divine Muffins sells its muffins to restaurants and coffee houses for an average selling price of $31 per case. The following information relates to the budget for Divine Muffins for this year (all figures are annual totals unless otherwise noted): Budget information: Budgeted sales in cases. . . . . . 9,300 cases Packaging cost per case. . . . . . $5 Shipping expense per case. . . . $1 Sales commission expense. . . . 3% of sales price Salaries expense. . . . . . . . . . . . $6,800 Office rent. . . . . . . . . . . . . . . . . $3,100 Depreciation. . . . . . . . . . . . . . . $2,900 Insurance expense. . . . . . . . . . $2,300 Office supplies expense. . . . . . $1,300 Actual expenses: Packaging cost. . . . . . . . . . . . . . $50,600 Shipping expense. . . . . . . . . . . . $10,900 Sales commission expense. . . . . $9,423 Salaries expense. . . . . . . . . . . . . $8,400 Office rent. . . . . . . . . . . . . . . . . . $3,100 Depreciation. . . . . . . . . . . . . . . . $2,900 Insurance expense. . . . . . . . . . . $1,900 Office supplies expense. . . . . . . $1,800 During the year, DivineMuffins actually sold 9,900 cases, resulting in total sales revenue of $314,100. Requirement: Construct a flexible budget performance report for Divine Muffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).

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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Question

Divine Muffins sells its muffins to restaurants and coffee houses for an average selling price of $31 per case. The following information relates to the budget for Divine Muffins for this year (all figures are annual totals unless otherwise noted):

Budget information:

Budgeted sales in cases. . . . . .	9,300 cases
Packaging cost per case. . . . . .	$5
Shipping expense per case. . . .	$1
Sales commission expense. . . .	3% of sales price
Salaries expense. . . . . . . . . . . .	$6,800
Office rent. . . . . . . . . . . . . . . . .	$3,100
Depreciation. . . . . . . . . . . . . . .	$2,900
Insurance expense. . . . . . . . . .	$2,300
Office supplies expense. . . . . .	$1,300

Actual expenses:

Packaging cost. . . . . . . . . . . . . .	$50,600
Shipping expense. . . . . . . . . . . .	$10,900
Sales commission expense. . . . .	$9,423
Salaries expense. . . . . . . . . . . . .	$8,400
Office rent. . . . . . . . . . . . . . . . . .	$3,100
Depreciation. . . . . . . . . . . . . . . .	$2,900
Insurance expense. . . . . . . . . . .	$1,900
Office supplies expense. . . . . . .	$1,800

During the year, DivineMuffins actually sold 9,900 cases, resulting in total sales revenue of $314,100.

Requirement:

Construct a flexible budget performance report for Divine Muffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).

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