Question

Solitaire Company’s fixed budget performance report for June follows. The $318,750 budgeted expenses include $255,000 variable expenses and $63,750 fixed expenses. Actual expenses include $71,450 fixed expenses.

	Fixed Budget			Actual Results			Variances
Sales (in units)		8,500			10,900
Sales (in dollars)	$	425,000		$	545,000		$	120,000	F
Total expenses		318,750			381,500			62,750	U
Income from operations	$	106,250		$	163,500		$	57,250	F

Prepare a flexible budget performance report showing any variances between budgeted and actual results. List fixed and variable expenses separately.

Answer 1

Solution:

Solitaire Company
Flexible Budget Performance Report
For the month June 30
Particulars	Flexible Budget (10900)	Actual results (10900)	variances	fav./Unf.
Sales	$5,45,000	$5,45,000	$0	None
Variable Expense	$3,27,000	$3,10,050	$16,950	F
Contribution margin	$2,18,000	$2,34,950	$16,950	F
Fixed Expense	$63,750	$71,450	$7,700	U
Income from Operations	$1,54,250	$1,63,500	$9,250	F