The following data are for the month of April for the Reebok

The following data are for the month of April for the Reebok Company, a maker of running shoes:

Master budget date: Sales of 9,000 pairs at $30 a pair; variable cost of $23 a pair: total fixed costs of $18,000

Actual results: Sales of 9,600 pairs at $29 a pair; variable cost of $24 a pair; total fixed costs of $18,200

What were the total sales-activity and flexible-budget cariances for the month of April?

Solution

Reebok Company

Flexible - Budget Variances Report Statement

For the month of April

Actual

Budgeted

Variance

9,600 Pairs

9,000 Pairs

Sales Revenue

278,400

270,000

8,400

Favorable

Less : Variable Costs

230,400

207,000

23,400

Unfavorable

Contribution Margin

48,000

63,000

15,000

Unfavorable

Less : Fixed Costs

18,200

18,000

200

Unfavorable

Net Operating Income

29,800

45,000

15,200

Unfavorable

Reebok Company
Flexible - Budget Variances Report Statement
For the month of April
	Actual	Budgeted	Variance
	9,600 Pairs	9,000 Pairs
Sales Revenue	278,400	270,000	8,400	Favorable
Less : Variable Costs	230,400	207,000	23,400	Unfavorable
Contribution Margin	48,000	63,000	15,000	Unfavorable
Less : Fixed Costs	18,200	18,000	200	Unfavorable
Net Operating Income	29,800	45,000	15,200	Unfavorable