Question

# 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 effect of each variance by selecting for favorable, unfavorable, and no variance)

FLEXIBLE BUDGET

 flexible budget actual variance favourable or unfavourable production 11800 11800 sales 955800 985000 29200 favourable variable cost 401200 361000 40200 favourable fixed cost 280000 295000 (15000) unfavourable

notes:

1. fixed cost for flexible budget is same as budgeted fixed cost and actual fixed cost is given in the question.

2. budgeted variable cost = 11800/34 = \$401200 and actual variable cost is given.

3. budgeted sales = 81x 11800 = \$955800 and actual sales is given.

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