1
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute amount of revenue included in flexible budget
1
Answer to Problem 1TF15
The amount of revenue included in flexible budget is $175,000.
Explanation of Solution
2
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute employee salaries and wages in flexible budget.
2
Answer to Problem 1TF15
The employee salaries and wages in flexible budget is $88,500.
Explanation of Solution
3
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute travel expenses in flexible budget.
3
Answer to Problem 1TF15
The travel expense in flexible budget is $21,000.
Explanation of Solution
4
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute other expenses in flexible budget.
4
Answer to Problem 1TF15
The other expenses in flexible budget are $36,000.
Explanation of Solution
The Flexible budget other expenses is $36,000 in May month.
5
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute net operating income in flexible budget.
5
Answer to Problem 1TF15
The net operating income in flexible budget is $29,500
Explanation of Solution
Particulars | Amount | Amount |
Revenue | $175,000 | |
Less: Salaries and wages | $88,500 | |
Travel expenses | $21,000 | |
Other expenses | $36,000 | $145,500 |
Net Operating Income | $29,500 |
6
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute revenue variances.
6
Answer to Problem 1TF15
The revenue variances is $15,000 U
Explanation of Solution
7
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute employee salaries and wages spending variance.
7
Answer to Problem 1TF15
The employee salaries and wages spending variance is $500 F.
Explanation of Solution
8
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute travel expenses in spending variance.
8
Answer to Problem 1TF15
The travel expenses in spending variance are $2,000 F.
Explanation of Solution
9
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute other expense spending variance.
9
Answer to Problem 1TF15
The other expense spending variance is $1,500 F
Explanation of Solution
10
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute amount if revenue in planning budget.
10
Answer to Problem 1TF15
The amount if revenue in planning budget is $150,000.
Explanation of Solution
11
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute amount of employee salaries and wages in planning budget.
11
Answer to Problem 1TF15
The amount of employee salaries and wages in planning budget is $83,000.
Explanation of Solution
12
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute amount of travel expenses in planning budget.
12
Answer to Problem 1TF15
The amount of travel expenses in planning budget is $18,000.
Explanation of Solution
13
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute amount of other expenses in planning budget.
13
Answer to Problem 1TF15
The amount of other expenses in planning budget is $36,000.
Explanation of Solution
The amount of other expenses in planning budget is $36,000 for the month of May.
14
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute activity variance report with respect to its revenue.
14
Answer to Problem 1TF15
The activity variance report with respect to its revenue is $25,000 F
Explanation of Solution
15
Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.
Compute activity variance with respect to each of its expenses.
15
Answer to Problem 1TF15
The activity variance with respect to employee salaries and wages is $5,500 unfavorable, travel expense is $3,000 unfavorable, and other expenses are nil
Explanation of Solution
Particulars | Flexible budget | Planning budget | Activity Variances |
Employee salaries and wages | $88,500 | $83,000 | $5,500(U) |
Travel expenses | $21,000 | $18,000 | $3,000 (U) |
Other expenses | $36,000 | $36,000 | $0 |
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Chapter 9 Solutions
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