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In: Accounting

Pleasant View Farms raises beef cattle and measures its output on the number of cows sold....

Pleasant View Farms raises beef cattle and measures its output on the number of cows sold. The firm managers provided the following fixed and variable costs estimates that they use for budgeting purposes and the actual results for the year:

                Fixed Element per year Variable Element per Cow sold   Actual Total for May                                                      

Sales                                     2,000.00                 57,000.00                                                        

Wages     10,000.00                           100.00                15,000.00                                                        

Feed          10,000.00                           500.00                24,500.00                                                        

Rent            4,000.00                             6,000.00                                                        

Insurance                  2,000.00                             10.00                  2,290.00                                                        

Property Tax            6,000.00                             6,500.00                                                        

                                                                                                               

When preparing its planning budget, the farm estimated that it would sell 25 cows during the year; however, during 2020 the farm actually sold 29 cows.                                                                                      

                Planning               Activity Variance              U/F        Flex        Revenue/Spend Variance             U/F        Actuals

Activity                                                                                                

Sales/Revenues                                                                                               

Less expenses                                                                                                                                                                                 

Net Income   

Requirements:                                                                                                 

1              Complete the table above to show the planning budget, flex budget, actuals and all variances, denoting favorable or unfavorable.

  1.             What was the projected net income of the Flex budget?                                                               
  2.            What is the revenue variance?                                                                 
  3.            What is the expense for Feed in the Planning Budget?                                                                   

                i.              Which, if any, expenses had favorable variances?                                                                                  

           j.                 Which expenses were deemed only variable?     

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Expert Solution

ekkarill92 answered 1 year ago
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