Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $270,000. During June, the company produced and sold 10,800 units and incurred actual variable costs of $351,000 and actual fixed costs of $285,000. Actual sales for June were $885,000. 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)

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7 September, 06:44

Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $270,000. During June, the company produced and sold 10,800 units and incurred actual variable costs of $351,000 and actual fixed costs of $285,000. Actual sales for June were $885,000. 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)

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Lucia Jarvis · Answer 1

Answer and Explanation:

The preparation of flexible budget report is shown below:-

Xion CO.

Flexible budget report

Flexible budget Actual results Variances Favorable/

Unfavorable

Sales $864,000 $885,000 $21,000 Favorable

(10,800 * $80)

(-) Variable

cost $378,000 $351,000 $27,000 Favorable

(10,800 * $35)

Contribution $486,000 $534,000 $48,000 Favorable

(-) Fixed cost $270,000 $285,000 $15,000 Unfavorable

Net income $216,000 $249,000 $33,000 Favorable