I. The actual information pertains to the month of August. As part of the budgeting proAlloway's Fencing Company developed the following static budget for August. Allow:in the process of preparing the flexible budget and understanding the results.ActualFlexibleStaticResultsBudgetBudget25,000Sales volume (in units)20,000Sales revenues$1,000,000512,000$$$1,250,000Variable costs600,000Contribution margin488,000$650,000Fixed costs458,000$450,000Operating profit$30,000$$ 200,000Required:Prepare the flexible budget and state the flexible budget variances for variable costand fixed cost.

Solution: Preparation of flexible budget and flexible budget variances are as under:

Answered: I. The actual information pertains to…

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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