Question

enter formulas in all cells that contain question marks.

For example, in cell B30 enter the formula "=B19".

Notes:

In the text, variances are always displayed as positive numbers. To accomplish this, you can use the ABS() function in Excel. For example, the formula in cell C31 would be "=ABS(E31−B31)".

Cells D31 through D39 and G31 through G39 already contain formulas to compute and display whether variances are Favorable or Unfavorable. Do not enter data or formulas into those cells—if you do, you will overwrite these formulas.

Check your worksheet by changing the revenue in cell D4 to $16.00; the cost of ingredients in cell D5 to $6.50; and the wages and salaries in cell B6 to $10,000. The activity variance for net operating income should now be $850 U and the spending variance for total expenses should be $410 U. If you do not get these answers, find the errors in your worksheet and correct them.

Data
Revenue			$16.50	q
Cost of ingredients			$6.25	q
Wages and salaries	$10,400
Utilities	$800	+	$0.20	q
Rent	$2,200
Miscellaneous	$600	+	$0.80	q
Actual results:
Revenue	$27,920
Cost of ingredients	$11,110
Wages and salaries	$10,130
Utilities	$1,080
Rent	$2,200
Miscellaneous	$2,240
Planning budget activity	1,800	meals served
Actual activity	1,700	meals served
Enter a formula into each of the cells marked with a ? below
Review Problem: Variance Analysis Using a Flexible Budget
Construct a flexible budget performance report
		Revenue
		and
	Actual	Spending		Flexible	Activity		Planning
	Results	Variances		Budget	Variances		Budget
Meals served	?			?			?
Revenue	?	?		?	?		?
Expenses:
Cost of ingredients	?	?		?	?		?
Wages and salaries	?	?		?	?		?
Utilities	?	?		?	?		?
Rent	?	?		?	?		?
Miscellaneous	?	?		?	?		?
Total expenses	?	?		?	?		?
Net operating income	?	?		?	?		?

PLEASE SHOW FORMULAS ^^^^

Revise the data in your worksheet to reflect the results for the subsequent period as shown below:

A	B	C	D	E
Data
Revenue			$16.50	q
Cost of ingridients			$6.25	q
wages and salaries	$10,400
utilities	$800	+
Rent	$2,200
miscellaneous	$600	+	$0.80	q
Actual Results:
Revenue	$29,200
cost of ingridients	$ 10,985
wages and salaries	$ 10,395
utilities	$ 1,155
rent	$ 2,200
miscellaneous	$ 2,075

Planning Budget 1,700 meals served

Actual Activity 1,800 meals served

a. What is the activity variance for revenue?

b. What is the spending variance for the cost of ingredients?

c. What is spending variance for wages and salaries?

d. What is spending variance for total expenses?

Answer 1

Budgets are variances are as prepared below:

Flexible Budget Performance Report

For the Month Ended May 31 Particulars Actual Results Revenue and spending variances Flexible Budget Activity variances Planning Budget Meals served 1700 1700 1800 Revenue 27920 ($130) U 28050 1650 U 29700 Expenses: Cost of ingredients 11,110 $485 U 10,625 625 F 11,250 Wages and salaries 10,130 ($270) F 10,400 0 NONE 10,400 Utilities 1,080 ($60) F 1,140 20 F 1,160 Rent 2,200 0 NONE 2,200 0 NONE 2,200 Miscellaneous 2,240 $280 U 1,960 80 F 2,040 Total expenses 26,760 $435 U 26325 725 F 27050 Net operating income working: 1,160 ($565) U 1,725 925 U 2,650 Note: Revenue and spending variances = Flexible Budget less Actual Results Activity variances = Planning Budget less Flexible Budget Planning Flexible Budget Budget Meals served 1,800 1,700 Revenue 16.5*1,800 16.5*1,700 Expenses: Cost of ingredients 6.25*1,800 6.25*1,700 Wages and salaries 10,400 10,400 Utilities 800+.20*1,800 800+.20*1,700 Rent 2,200 2,200 Miscellaneous 600+0.80*1,800 600+0.80*1,700