Construct a flexible budget performance report for Stone Canyon Muffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
Construct a flexible budget performance report for Stone Canyon Muffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...
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Question
Stone Canyon Muffins sells its muffins to restaurants and coffee houses for an average selling price of $27 per case. The following information relates to the budget for Stone Canyon Muffins for this year (all figures are annual totals unless otherwise noted):
Budget information:
Budgeted sales in cases. . . . . .
|
9,300 cases
|
---|---|
Packaging cost per case. . . . . .
|
$4
|
Shipping expense per case. . . .
|
$2
|
Sales commission expense. . . .
|
1% of sales price
|
Salaries expense. . . . . . . . . . . .
|
$7,000
|
Office rent. . . . . . . . . . . . . . . . .
|
$3,800
|
|
$2,600
|
Insurance expense. . . . . . . . . .
|
$2,500
|
Office supplies expense. . . . . .
|
$600
|
Actual expenses:
Packaging cost. . . . . . . . . . . . . .
|
$39,300
|
---|---|
Shipping expense. . . . . . . . . . . .
|
$21,800
|
Sales commission expense. . . . .
|
$2,641
|
Salaries expense. . . . . . . . . . . . .
|
$8,500
|
Office rent. . . . . . . . . . . . . . . . . .
|
$3,800
|
Depreciation. . . . . . . . . . . . . . . .
|
$2,600
|
Insurance expense. . . . . . . . . . .
|
$2,300
|
Office supplies expense. . . . . . .
|
$1,300
|
During the year, Stone Canyon Muffins actually sold 9,500 cases, resulting in total sales revenue of $264,100.
Requirement:
Construct a flexible budget performance report for Stone Canyon Muffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
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