Graham Corporation used the following data to evaluate its current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit. Actual Budgeted Units sold 1,289,000 1,300,000 Variable costs 2,350,000 2,600,000 Fixed costs 2,025,000 1,982,000 a. Prepare the actual income statement, flexible budget, and static budget. Do not use negative signs with any of your answers below. Actual Results Flexible Budget Static Budget Units sold Answer Answer Answer Revenues Answer Answer Answer Variable costs Answer Answer Answer Contribution margin Answer Answer Answer Fixed costs Answer Answer Answer Operating income Answer Answer Answer For questions b., c., and d., do not use negative signs with your answers. Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers. b. What is the static-budget variance of revenues? $Answer Answer c. What is the flexible budget variance for variable costs? $Answer Answer d. What is the flexible budget variance for fixed costs? $Answer
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.
Static and Flexible Budgets
Graham Corporation used the following data to evaluate its current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit.
| Actual | Budgeted | ||
|---|---|---|---|
| Units sold | 1,289,000 | 1,300,000 | |
| Variable costs | 2,350,000 | 2,600,000 | |
| Fixed costs | 2,025,000 | 1,982,000 |
a. Prepare the actual income statement, flexible budget, and static budget.
Do not use negative signs with any of your answers below.
| Actual Results | Flexible Budget | Static Budget | ||
|---|---|---|---|---|
| Units sold | Answer
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Answer
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| Revenues | Answer
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| Variable costs | Answer
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| Contribution margin | Answer
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| Fixed costs | Answer
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| Operating income | Answer
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Answer
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For questions b., c., and d., do not use negative signs with your answers. Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers.
b. What is the static-
$Answer
Answer
c. What is the flexible budget variance for variable costs?
$Answer
Answer
d. What is the flexible budget variance for fixed costs?
$Answer
Answer
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