Question

Brodrick Company expects to produce 20,000 units for the year ending December 31. A flexible budget for 20,000 units of production reflects sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. Assume that actual sales for the year are $480,000 (26,000 units), actual variable costs for the year are $112,000, and actual fixed costs for the year are $145,000. Prepare a flexible budget performance report for the year. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

Answer 1

Answer: Check attachment

Explanation:

The flexible budget performance report for the year has been solved and attached.

Note that the selling price per unit was calculated as:

= 400,000 /20,000

= $20 per unit

Therefore, total sales was gotten as:

= 26000 × $20

= $520,000

Variable cost per unit was calculated as:

= 80,000/20,000

= $4 per unit

Then, total cost was:

= $4 × 26,000

= $104,000

Check attachment for further details.