Solitaire Companys fixed budget performance report for June

Solitaire Company\'s fixed budget performance report for June follows. The $622,500 budgeted expenses include $713,800 variable expenses and $91,300 fixed expenses. Actual expenses include $103,300 fixed expenses Fixed Budget Actual Results Variances Sales (in units) 8,300 10,700 Sales (in dollars) Total expenses $830,000 $1,070,000 $240,000 F 749,000126,500 U 622,500 Income from operations $207,500 321,000 $113,500 F Prepare a flexible budget performance report showing any variances between budgeted and actual results. List fixed and variable expenses separately SOLITAIRE COMPANY Flexible Budget Performance Report For Month Ended June 30 Flexible Budget Actual ResultsVariances Favorable/ Unfavorable Contribution margin

Solution

Working:

Flexible budget:

Sales = $830000 x 10700/8300 =$1070000

Variable expenses = $713800 x 10700/8300 = $920200

Actual results:

Variable expenses = Total expenses - Fixed expenses = $749000 - $103300 = $645700

SOLITAIRE COMPANY
Flexible Budget Performance Report
For Month Ended June 30
	Flexible Budget	Actual Results	Variances	Favorable/ Unfavorable
Sales	1070000	1070000	0
Variable expenses	920200	645700	274500	Favorable
Contribution margin	149800	424300	274500	Favorable
Fixed expenses	91300	103300	12000	Unfavorable
Net income	58500	321000	262500	Favorable