Here ar data for the stove division of Appliances Non, which produces and sels c

Question

Here ar data for the stove division of Appliances Non, which produces and sels cornplete line of kitchen stoves: Revenue ariable production costs Fixed manufacturing costs ariable selling expenscs Fixed selling expenses $16,565 $17,473 5,301 5,798 2,053 764 1,285 1,281 1,994 ominlstrative expenses Operating income The budget, set at the beginning of the year, was based on estimates of sales and costs, Administrative expenses include charges by corporate headquarters for provlding strategic guldance. These fixed costs are allocated to divislons using revenues as the allocation base ? (a) Assume hat a differen vu ume stoves as old han was budgeted and prepare a exible budget us ng he change in revenue either ? negative sign preceding the number e.g.-45 or parentheses eg. (45).) to adjust he variable custs. Ca cu ate budge Variances oura dnswers o O decima p aces e g 125 Enter negative amounts using Static Budget Flexible Budget Flexible Budget Variance Actual

Explanation / Answer

Solution:

Flexible Budget Report Particulars Static Budget Flexible Budget Actual Flexible Budget Variance Revenue $16,565 $17,473 $17,473 $0 Expenses: Variable production costs $5,301 $5,592 $5,798 -$206 Fixed manufacturing costs $1,994 $1,994 $2,053 -$59 Variable selling expenses $663 $699 $764 -$65 Fixed selling expenses $1,286 $1,286 $1,281 $5 Administrative expenses $4,797 $4,797 $5,551 -$754 Total Expenses $14,041 $14,368 $15,447 -$1,079 Operating Income $2,524 $3,105 $2,026 -$1,079

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