Question 1 Not complete Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 9,600 units were produced. The budget reflects the company's normal capacity of 10,000 units. Actual Cost Budget 9,600 10,000 units units $ Type $136,800 $140,000 $(3,200) Favorable 277,200 280,000 (2,800) Favorable 98,400 96,000 2,400 Unfavorable 72,400 72,000 400 Unfavorable $584,800 $588,000 $(3,200) Direct material Direct labor Variable overhead Fixed overhead Total Direct material $ Direct labor Variable overhead Fixed overhead Totals Marked out of 6.25 $ P Flag question a. Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar. Variance Actual Costs Variances $ 0 $ Flexible Budget $ 0 $ b. Which of the two performance reports should Sterling Company management use to measure the company's operating efficiency in May? 0 Type + + ÷ + +

Question 1 Not complete Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 9,600 units were produced. The budget reflects the company's normal capacity of 10,000 units. Actual Cost Budget 9,600 10,000 units units $ Type $136,800 $140,000 $(3,200) Favorable 277,200 280,000 (2,800) Favorable 98,400 96,000 2,400 Unfavorable 72,400 72,000 400 Unfavorable $584,800 $588,000 $(3,200) Direct material Direct labor Variable overhead Fixed overhead Total Direct material $ Direct labor Variable overhead Fixed overhead Totals Marked out of 6.25 $ P Flag question a. Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar. Variance Actual Costs Variances $ 0 $ Flexible Budget $ 0 $ b. Which of the two performance reports should Sterling Company management use to measure the company's operating efficiency in May? 0 Type + + ÷ + +

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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Check my w 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 ere to search s $ Variances 1 of 10 ⠀⠀⠀ Unfavorable Favorable Favorable No variance Favorable Next >
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Budgets Question 1. A manager had the following operating budget and achieved the actual results shown. Calculate the variance and variance percentage for each line item. Then answer the questions that follow. Sales Budget Actual Variance Food $500,000 $550,000 Beverage |50,000 165,000 $650,000 Total Sales Total Controllable Expense Total Fixed Expense 450,000 495,000 135,000 135,000 Profit (Loss) $65,000 What is your assessment of this operation's expense control performance during this budget period? 2. Why are managers who are skilled at controlling expenses in such high demand in the hospitality industry? W APR
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