Answer:
Bay City Company
Flexible Budget Performance Report:
                                          Flexible Budget    Actual Results    Variances 
Sales (in units)                            4,900                4,900 
Sales (in dollars)                  $392,000          $431,200        $39,200 F 
Total expenses:
Variable expenses                245,000           276,000           31,200 U
Fixed expenses                     140,000            130,000            10,000 F
Total expenses                     385,000           406,000            21,200 U 
Income from operations        $7,000           $25,200          $18,200 U 
Explanation:
a) Data and Calculations:
Variable expenses = $300,000
Fixed expenses =      $140,000
Budgeted total expenses = $440,000
Actual expenses:
Fixed expenses = $130,000
                                          Fixed Budget    Actual Results    Variances 
Sales (in units)                            6,000                4,900 
Sales (in dollars)                  $480,000          $431,200        $48,800 U 
Total expenses                     440,000           406,000           34,000 F 
Income from operations      $40,000           $25,200         $14,800 U 
Flexing the budgets:
Sales revenue = $392,000 ($480,000/6,000 * 4,900)
Variable expenses = $245,000 ($300,000/6,000 * $4,900)
Actual variable expenses = $276,000 ($406,000 - $130,000)