Perfect Parties, Incorporated has several divisions. One division provides birthday parties at their facility. Each party sold provides entertainment, decorations, food, and party favors for 10 children. The bookkeeper has prepared a report comparing actual results for the month of June to budgeted results. Perfect Parties Birthday Party Division Analysis of Revenues and Costs For the Month Ended June 30 Planning Budget Actual Results Variances Number of parties 80 92 Revenue $36,000 $39,560 $3,560 F Expenses: Food costs 7,200 8,648 1,448 U Party supplies 3,200 3,404 204 U Party worker wages 6,400 7,728 1,328 U Administrative salaries 3,700 3,500 200 F Equipment depreciation 1,200 1,200 0 None Rent 5,000 5,000 0 None Total expense 26,700 29,480 2,780 U Net operating income $9,300 $10,080 $780 F Food costs, party supplies, and party worker wages are variable costs. Administrative salaries, equipment depreciation, and rent are fixed costs. Sove: Prepare a new report for June using the flexible budget approach.
Perfect Parties, Incorporated has several divisions. One division provides birthday parties at their facility. Each party sold provides entertainment, decorations, food, and party favors for 10 children. The bookkeeper has prepared a report comparing actual results for the month of June to budgeted results. Perfect Parties Birthday Party Division Analysis of Revenues and Costs For the Month Ended June 30 Planning Budget Actual Results Variances Number of parties 80 92 Revenue $36,000 $39,560 $3,560 F Expenses: Food costs 7,200 8,648 1,448 U Party supplies 3,200 3,404 204 U Party worker wages 6,400 7,728 1,328 U Administrative salaries 3,700 3,500 200 F Equipment depreciation 1,200 1,200 0 None Rent 5,000 5,000 0 None Total expense 26,700 29,480 2,780 U Net operating income $9,300 $10,080 $780 F Food costs, party supplies, and party worker wages are variable costs. Administrative salaries, equipment depreciation, and rent are fixed costs. Sove: Prepare a new report for June using the flexible budget approach.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
| Perfect Parties, Incorporated has several divisions. One division provides birthday parties at their facility. | ||||
| Each party sold provides entertainment, decorations, food, and party favors for 10 children. | ||||
| The bookkeeper has prepared a report comparing actual results for the month of June to budgeted results. | ||||
| Perfect Parties | ||||
| Birthday Party Division Analysis of Revenues and Costs | ||||
| For the Month Ended June 30 | ||||
| Planning Budget | Actual Results | Variances | ||
| Number of parties | 80 | 92 | ||
| Revenue | $36,000 | $39,560 | $3,560 | F |
| Expenses: | ||||
| Food costs | 7,200 | 8,648 | 1,448 | U |
| Party supplies | 3,200 | 3,404 | 204 | U |
| Party worker wages | 6,400 | 7,728 | 1,328 | U |
| Administrative salaries | 3,700 | 3,500 | 200 | F |
| Equipment |
1,200 | 1,200 | 0 | None |
| Rent | 5,000 | 5,000 | 0 | None |
| Total expense | 26,700 | 29,480 | 2,780 | U |
| Net operating income | $9,300 | $10,080 | $780 | F |
| Food costs, party supplies, and party worker wages are variable costs. | ||||
| Administrative salaries, equipment depreciation, and rent are fixed costs. | ||||
| Sove: | ||||
| Prepare a new report for June using the flexible budget approach. |
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