Bay City Company’s fixed budget performance report for July follows. The $587,000 budgeted expenses include $400,000 variable expenses and $187,000 fixed expenses. Actual expenses include $177,000 fixed expenses.
| Fixed Budget | Actual Results | Variances | ||||||||
| Sales (in units) | 8,000 | 6,900 | ||||||||
| Sales (in dollars) | $ | 640,000 | $ | 607,200 | $ | 32,800 | U | |||
| Total expenses | 587,000 | 551,000 | 36,000 | F | ||||||
| Income from operations | $ | 53,000 | $ | 56,200 | $ | 3,200 | U | |||
Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately. (Do not round intermediate calculations.)
Explanation:
| Supporting computations | ||
| Total fixed budget sales | $ | 640,000 |
| Total units budgeted | ÷ | 8,000 |
| Budgeted selling price (per unit) | $ | 80 |
| Flexible budget units | × | 6,900 |
| Flexible budget sales | $ | 552,000 |
| Total fixed budget variable expenses | $ | 400,000 |
| Total units budgeted | ÷ | 8,000 |
| Budgeted variable expenses (per unit) | $ | 50.00 |
| Flexible budget units | × | 6,900 |
| Flexible budget variable expenses | $ | 345,000 |
| Total actual expenses | $ | 551,000 |
| Less actual fixed expenses | 177,000 | |
| Total actual variable expenses | $ | 374,000 |