Chapter 10, Problem 10.26AE

Prepare a flexible budget performance report (Learning Objective 5)

Main Street Muffins sells its muffins to restaurants and coffee houses for an average selling price of $26 per case. The following information relates to the budget for Main Street Muffins for this year (all figures are annual totals unless otherwise noted):

Budgeted sales in cases	9,100 cases
Packaging cost per case	$ 1
Shipping expense per case	$ 2
Sales commission expense	5% of sales price
Salaries expense	$6,500
Office rent	$3,900
Depreciation	$2,500
Insurance expense	$1,800
Office supplies expense	$900

During the year, Main Street Muffins actually sold 9,500 cases, resulting in total sales revenue of $255,200. Actual expenses (in total) from this year are as follows:

Packaging cost	$ 10,600
Shipping expense	$ 19,500
Sales commission expense	$ 12,760
Salaries expense	$ 7,300
Office rent	$ 3,900
Depreciation	$ 2,500
Insurance expense	$ 1,600
Office supplies expense	$ 1,600

Requirement

Construct a flexible budget performance report for Main Street Muffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).