Question

Brodrick Company expects to produce 21,700 units for the year ending December 31. A flexible budget for 21,700 units of production reflects sales of $434,000; variable costs of $65,100; and fixed costs of $142,000. Assume that actual sales for the year are $500,000 (27,400 units), actual variable costs for the year are $113,700, and actual fixed costs for the year are $134,000.Prepare a flexible budget performance report for the year.

Answer 1

Answer:

$\left[\begin{array}{cccc}& Flexible Budget& Actual& Variance\\ Sales&548,000&500,000&48000U\\ Variable&-82,200&-113,700&31,500U\\ Contribution&465,800&386300&79,500U\\ Fixed Cost&-142,000&-134,000&8,000F\\ Income&323,800&252300&71,500U\\\end{array}\right]$

Explanation:

Sales Price: 434,000 / 21,700 = 20

Variable cost: 65,100 / 21,700 =   3

fixed cost: 142,000

Values at 27,400 units:

sales:  27,400 units x $20 = 548,000

variable cost: 27,400 units x $3 = 82,200

Now, we compare with the actual result and calcualte the income