In: Accounting
Static and Flexible Budgets
Graham Corporation used the following data to evaluate its current
operating system. The company sells items for $10 each and used a
budgeted selling price of $10 per unit.
Actual | Budgeted | ||
---|---|---|---|
Units sold | 794,000 | 800,000 | |
Variable costs | 1,745,000 | 2,000,000 | |
Fixed costs | 1,420,000 | 1,375,000 |
a. Prepare the actual income statement, flexible budget, and static budget.
Do not use negative signs with any of your answers below.
Actual Results | Flexible Budget | Static Budget | ||
---|---|---|---|---|
Units sold | Answer | Answer | Answer | |
Revenues | Answer | Answer | Answer | |
Variable costs | Answer | Answer | Answer | |
Contribution margin | Answer | Answer | Answer | |
Fixed costs | Answer | Answer | Answer | |
Operating income | Answer | Answer | Answer |
For questions b., c., and d., do not use negative signs with your answers. Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers.
b. What is the static-budget variance of revenues?
$Answer AnswerFU
c. What is the flexible budget variance for variable costs?
$Answer AnswerFU
d. What is the flexible budget variance for fixed costs?
$Answer AnswerFU