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Brodrick Company expects to produce 20,500 units for the year ending December 31. A flexible budget for 20,500 units of production reflects sales of $430,500; variable costs of $61,500; and fixed costs of $144,000.

Assume that actual sales for the year are $538,600 (27,600 units), actual variable costs for the year are $113,200, and actual fixed costs for the year are $135,000.

Prepare a flexible budget performance report for the year. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

Answer 1

Answer:

BRODRICK COMPANY
Flexible Budget Performance Company
For the year ended Decenber 31
Particulars	Flexible Budget	Actual Results	Variance	Remark
Sales	(430500/20500 units)*27600 units=579600	538600	-41000	Unfavourable
less:- Variable costs	(61500/20500 units)*27600 units=82800	113200	-30400	Unfavourable
Contribution Margin	496800	425400	-71400	Unfavourable
Less:- Fixed costs	144000	135000	9000	Favourable
Income from Operations	352800	290400	-62400	Unfavourable