QS 21-1 (Algo) Flexible budget performance report LO P1 Beech Company produced and sold 112,000 units in May. For the level of production in May, budgeted amounts were sales, $1,260,000; variable costs, $846,000; and fixed costs, $260,000. The following actual results are available for May. Actual Results Sales (112,000 units) Variable costs Fixed costs $ 1,237,000 814,500 260,000 Prepare a flexible budget performance report for May. Indicate whether each variance is favorable or unfavorable. (Indicate the eff of each variance by selecting favorable, unfavorable, or no variance.)
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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QS 21-1 (Algo) Flexible budget performance report LO P1
Beech Company produced and sold 112,000 units in May. For the level of production in May, budgeted amounts were sales,
$1,260,000; variable costs, $846,000; and fixed costs, $260,000. The following actual results are available for May.
Actual Results
Sales (112,000 units)
Variable costs
Fixed costs
$ 1,237,000
814,500
260,000
Prepare a flexible budget performance report for May. Indicate whether each variance is favorable or unfavorable. (Indicate the effect
of each variance by selecting favorable, unfavorable, or no variance.)
BEECH COMPANY
Flexible Budget Performance Report
For Month Ended May 31
Flexible Budget Actual Results
Favorable/
Unfavorable
$
1,260,000
Sales
Variable costs
846,000
Contribution margin
414,000
0
Fixed costs
260,000
260,000
Income
154,000 $ (260,000)
Prev
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$
Variances
1 of 10 ⠀⠀⠀
Unfavorable
Favorable
Favorable
No variance
Favorable
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