Lewis Company reports the following fixed budget and actual results for May. Prepare a flexible budget performance report showing variances between budgeted and actual results. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Sales (units produced and sold) Sales (in dollars) Variable costs Fixed costs For Month Ended May 31 Fixed Budget 1,320 $ 900 per unit $360 per unit $ 143,000 LEWIS COMPANY Flexible Budget Performance Report Flexible Budget Actual Results (1,520 units) (1,520 units) Variances Actual Results 1,520 $ 1,395,000 $ 556,000 $ 134,000 Favorable or Unfavorable

Lewis Company reports the following fixed budget and actual results for May. Prepare a flexible budget performance report showing variances between budgeted and actual results. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Sales (units produced and sold) Sales (in dollars) Variable costs Fixed costs For Month Ended May 31 Fixed Budget 1,320 $ 900 per unit $360 per unit $ 143,000 LEWIS COMPANY Flexible Budget Performance Report Flexible Budget Actual Results (1,520 units) (1,520 units) Variances Actual Results 1,520 $ 1,395,000 $ 556,000 $ 134,000 Favorable or Unfavorable

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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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.

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Lewis Company reports the following fixed budget and actual results for May. Prepare a flexible budget performance report showing
variances between budgeted and actual results.
Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.
Sales (units produced and sold)
Sales (in dollars)
Variable costs
Fixed costs
For Month Ended May 31
Fixed Budget
1,320
$ 900 per unit
$360 per unit
$ 143,000
LEWIS COMPANY
Flexible Budget Performance Report
Flexible Budget Actual Results
(1.520 units) (1,520 units)
Variances
Actual Results
1,520
$ 1,395,000
$ 556,000
$ 134,000
Favorable or
Unfavorable

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