Top managers of Cole Industries predicted 2018 sales of 14,600 units of its product at a unit price of $7.00. Actual sales for the year were 14,000 units at $10.50 each. Variable costs were budgeted at $2.60 per unit, and actual variable costs were $2.70 per unit. Actual fixed costs of $43,000 exceeded budgeted fixed costs by $4,500. Prepare Cole's flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance? Prepare a flexible budget performance report for the year. First, complete the flexible budget performance report through the contribution margin line, then complete the report through the operating income line. Finally, compute the total variances. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.) Cole Industries Flexible Budget Performance Report For the Year Ended December 31, 2018 1 2 3 4 5 (1) - (3) (3) - (5) Budget Flexible Sales Amounts Actual Budget Flexible Volume Static Per Unit Results Variance Budget Variance Budget Units Sales Revenue Variable Costs
Top managers of Cole Industries predicted 2018 sales of 14,600 units of its product at a unit price of $7.00. Actual sales for the year were 14,000 units at $10.50 each. Variable costs were budgeted at $2.60 per unit, and actual variable costs were $2.70 per unit. Actual fixed costs of $43,000 exceeded budgeted fixed costs by $4,500. Prepare Cole's flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance? Prepare a flexible budget performance report for the year. First, complete the flexible budget performance report through the contribution margin line, then complete the report through the operating income line. Finally, compute the total variances. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.) Cole Industries Flexible Budget Performance Report For the Year Ended December 31, 2018 1 2 3 4 5 (1) - (3) (3) - (5) Budget Flexible Sales Amounts Actual Budget Flexible Volume Static Per Unit Results Variance Budget Variance Budget Units Sales Revenue Variable Costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Question
Top managers of
Cole
Industries predicted
2018
sales of
14,600
units of its product at a unit price of
$7.00.
Actual sales for the year were
14,000
units at
$10.50
each. Variable costs were budgeted at
$2.60
per unit, and actual variable costs were
$2.70
per unit. Actual fixed costs of
$43,000
exceeded budgeted fixed costs by
$4,500.
Prepare
Cole's
flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance?Prepare a flexible budget performance report for the year. First, complete the flexible budget performance report through the contribution margin line, then complete the report through the operating income line. Finally, compute the total variances. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.)
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Cole Industries
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Flexible Budget Performance Report
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For the Year Ended December 31, 2018
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5
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(1) - (3)
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(3) - (5)
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Budget
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Flexible
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Sales
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Amounts
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Actual
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Budget
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Flexible
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Volume
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Static
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Per Unit
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Results
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Variance
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Budget
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Variance
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Budget
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Units
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Sales Revenue
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Variable Costs
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Contribution Margin
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