Beech Company produced and sold 105,000 units of its product in May. For the level of production achieved in May, the budgeted amounts were: sales. $1,300,000; variable costs. $750,000: and fixed costs. $300,000. The following actual financial results are available for May. Actual Sales (105,000 units) $1,275,000 Variable costs712,500 Fixed costs300,000 Prepare a flexible budget performance report for May.

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Business

Ralph

20 June, 07:43

Beech Company produced and sold 105,000 units of its product in May. For the level of production achieved in May, the budgeted amounts were: sales. $1,300,000; variable costs. $750,000: and fixed costs. $300,000. The following actual financial results are available for May. Actual Sales (105,000 units) $1,275,000 Variable costs712,500 Fixed costs300,000 Prepare a flexible budget performance report for May.

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Dennis Boone · Answer 1

Total variance = 12,500 favorable

Explanation:

Giving the following information:

For the level of production achieved in May, the budgeted amounts were:

sales. $1,300,000

variable costs. $750,000

fixed costs. $300,000

The following actual financial results are available for May.

Actual Sales (105,000 units) $1,275,000

Variable costs 712,500

Fixed costs300,000

Flexible budget performance:

Sales = 1,300,000 - 1,275,000 = 25,000 unfavorable

Variable costs = 750,000 - 712,500 = 37,500 favorable

Fixed costs = 0

Total variance = 12,500 favorable