Question

Static and Flexible Budgets Graham Corporation used the following data to evaluate its current operating system....

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 991,000 1,000,000 Variable costs 1,280,000 1,500,000 Fixed costs 955,000 905,000 a. Prepare the actual income statement, flexible budget, and static budget. b. What is the static-budget variance of revenues? c. What is the flexible budget variance for variable costs? d. What is the flexible budget variance for fixed costs?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a) Prepare income statement

Actual Flexible budget Static budget
Sales 9910000 9910000 10000000
Variable cost 1280000 1486500 1500000
Contribution margin 8630000 8423500 8500000
Fixed cost 955000 905000 905000
Net income 7675000 7518500 7595000

b) Static budget variance for revenue = 9910000-10000000 = 90000 U

c) Flexible budget variance for variable cost = 1280000-1486500 = 206500 F

d) Flexible budget variance for fixed cost = 955000-905000 = 50000 U

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Static and Flexible Budgets Graham Corporation used the following data to evaluate its current operating system....
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 685,000 700,000 Variable costs 1,850,000 2,100,000 Fixed costs 1,525,000 1,485,000 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...
Daniels Corporation used the following data to evaluate their current operating system. The company sells items...
Daniels Corporation used the following data to evaluate their current operating system. The company sells items for $18 each and had used a budgeted selling price of $19 per unit.                                                                    Actual             Budgeted         Units sold                           280,000 units      278,000 units         Variable costs                            $960,000               $886,000         Fixed costs                                    $60,000                 $51,000 What is the static-budget variance of operating income? A. $316,000 unfavorable B. $325,000 favorable C. $325,000 unfavorable D. $316,000 favorable
Exercise 21-4 Preparing a flexible budget performance report LO P1 Xion Co. budgets a selling price...
Exercise 21-4 Preparing a flexible budget performance report LO P1 Xion Co. budgets a selling price of $81 per unit, variable costs of $34 per unit, and total fixed costs of $280,000. During June, the company produced and sold 11,800 units and incurred actual variable costs of $361,000 and actual fixed costs of $295,000. Actual sales for June were $985,000. Prepare a flexible budget report showing variances between budgeted and actual results. List variable and fixed expenses separately. (Indicate the...
Here are data for the stove division of Appliances Now, which produces and sells a complete...
Here are data for the stove division of Appliances Now, which produces and sells a complete line of kitchen stoves: (In thousands) Budget Actual Revenue $ 16,493 $ 17,474 Variable production costs 5,862 6,429 Fixed manufacturing costs 1,880 1,926 Variable selling expenses 452 546 Fixed selling expenses 1,275 1,268 Administrative expenses 4,783 5,541 Operating income $ 2,241 $ 1,764 The budget, set at the beginning of the year, was based on estimates of sales and costs. Administrative expenses include charges...
For CVS Brand Products 2017 year end, the following budgeted and actual results are available for...
For CVS Brand Products 2017 year end, the following budgeted and actual results are available for the bagged popcorn department: Budget Actual Bags of popcorn sold 10,000 13,000 Selling price $5 $4.75 Variable costs per bag $2 $1.75 Fixed costs $8,000 $6,500 Prepare the Static, Flexible, and Actual budgets for the popcorn department for 2017. Determine the static budget variance, the flexible budget variance, the total sales volume variance, indicating (F) favorable or (U) unfavorable for each line item in...
Privett Hospital bases its budgets on patient-visits. The hospital's static planning budget for November appears below:...
Privett Hospital bases its budgets on patient-visits. The hospital's static planning budget for November appears below: Budgeted number of patient-visits 3,600 Supplies (@ $3.50 per patient-visit) $ 12,600 Laundry (@ $5.10 per patient-visit) 18,360 Salaries 18,960 Occupancy costs 21,360 Total $ 71,280 Actual results for the month were: Actual number of patient-visits 3,860 Supplies $ 12,300 Laundry $ 19,407 Salaries $ 19,635 Occupancy costs $ 22,545 The spending variance for laundry costs in the flexible budget performance report for the...
True Or False 1- Fixed costs should not be included in a flexible budget because they...
True Or False 1- Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes. (       ) 2-To help assess how well a manager has controlled costs, actual costs should be compared to what the costs should have been for the actual level of activity. (       ) 3-The activity variance for revenue is favorable if the actual revenue for the period exceeds the revenue in the static planning budget. (      ...
Digital Solutions Inc. uses flexible budgets that are based on the following data: Sales commissions 6%...
Digital Solutions Inc. uses flexible budgets that are based on the following data: Sales commissions 6% of sales Advertising expense 14% of sales Miscellaneous administrative expense $10,000 per month plus 3% of sales Office salaries expense $55,000 per month Customer support expenses $17,000 per month plus 30% of sales Research and development expense $75,000 per month repare a flexible selling and administrative expenses budget for October for sales volumes of $400,000, $700,000, and $1,000,000. (Use Exhibit 5 as a model.)...
Because C Company has an operating environment with considerable uncertainty, it prepares flexible budgets for several...
Because C Company has an operating environment with considerable uncertainty, it prepares flexible budgets for several different volume levels. The per unit budgeted variable costs for direct materials, direct labor, supplies, indirect labor, and power are $7, $10, $1, $.50 and $.05 respectively. The budgeted fixed overhead for the period is Supervision of $4,000 and Depreciation of $3,000 and Rent of $2,000. What is the difference in total flexible budget costs between the volume range of 4,000 units and 5,000...
1) A budget prepared at a single volume of activity is referred to as a: A)...
1) A budget prepared at a single volume of activity is referred to as a: A) Strategic budget. B) Standard budget. C) Static budget. D) Flexible budget. Answer:  ___________ 2) Select the incorrect statement regarding flexible budgets. A) Flexible budgets often show the estimated revenues and costs at multiple volume levels. B) A flexible budget is used to compare actual to budgeted amounts. C) A flexible budget is also known as a master budget. D) Standard prices and costs are used...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT