This analysis of flexible and static budget variance follows Exhibit 8-6 on page 316. You have to calculate the total variable and fixed flexible budget variances and sales activity variances. All of the green shaded boxes (11 of them) are to contain answers. All of the variances must be designated as favorable or unfavorable.Only the ? marks and F or U will need answers. Use the chart on pg 316 that is added as a reference to get the number Flexible BudgetFor Actual SalesActivity +(3)Actual ResultsFlexible-BudgetVariances tSales-ActivityVariancesat ActualStaticActivity Level*(1)(2) = (1) – (3)Budget*(5)(4) = (3) – (5)Units7,0007,0002,000 U9,000Sales$ 217,000$217,000$62,000 U$279,000Variable costs158,2705,670 U152,60043,600 F196,200Contribution margin$ 58,730$5,670 U$ 64,400$18,400 U$ 82,800Fixed costs70,300300 U70,00070,000Operating income$ (11,570)$5,970 U$ (5,600)$18,400 U$ 12,800Total flexible-budget variancesTotal sales-activity variances$5,970 U$18,400 UTotal static budget variances, $24,370 U

The difference between flexible budget and actual results is known as flexible budget variance.…

Answered: Flexible Budget For Actual Sales…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 7P: Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level...

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This analysis of flexible and static budget variance follows Exhibit 8-6 on page 316. You have to calculate the total variable and fixed flexible budget variances and sales activity variances. All of the green shaded boxes (11 of them) are to contain answers. All of the variances must be designated as favorable or unfavorable.

Only the ? marks and F or U will need answers. Use the chart on pg 316 that is added as a reference to get the number

Flexible Budget
For Actual Sales
Activity +
(3)
Actual Results
Flexible-Budget
Variances t
Sales-Activity
Variances
at Actual
Static
Activity Level*
(1)
(2) = (1) – (3)
Budget*
(5)
(4) = (3) – (5)
Units
7,000
7,000
2,000 U
9,000
Sales
$ 217,000
$217,000
$62,000 U
$279,000
Variable costs
158,270
5,670 U
152,600
43,600 F
196,200
Contribution margin
$ 58,730
$5,670 U
$ 64,400
$18,400 U
$ 82,800
Fixed costs
70,300
300 U
70,000
70,000
Operating income
$ (11,570)
$5,970 U
$ (5,600)
$18,400 U
$ 12,800
Total flexible-budget variances
Total sales-activity variances
$5,970 U
$18,400 U
Total static budget variances, $24,370 U

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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