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, Divine Muffins actually sold 9,900 cases, resulting in total sales revenue of $314,100. Requirement: Construct a flexible budget performance report for DivineMuffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
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, Divine Muffins actually sold 9,900 cases, resulting in total sales revenue of $314,100. Requirement: Construct a flexible budget performance report for DivineMuffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
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
|
|
|
$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, Divine Muffins actually sold 9,900 cases, resulting in total sales revenue of $314,100.
Requirement:
Construct a flexible budget performance report for DivineMuffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education