A company manufactures and sells storage cabinets out of London, Ontario. They have provided the actual and static budget information for the month of October below: October October Actual Result Static Budget 5,156 3,780 Cabinet unit sales Per unit metrics Selling price Direct materials $117.00 $112.50 $28.00 $21.00 Direct labour $26.50 $25.00 $7.50 $9.00 $4.50 $5.50 Variable manufacturing overhead Variable selling and administrative costs Fixed costs per period Fixed manufacturing overhead Fixed selling and administrative costs $38,500 $37,629 $20,797 $24,100 Part A: Static Budget Performance Report Complete a static budget performance report for the month. Compute static variances as absolute numbers (i.e., insert as positive numbers) and for each variance indicate if it is favourable (F) or unfavourable (U). (1/2 mark each - 11 marks total) Static Budget Performance Report For the month ended October 31 Actual Result Static Budget Static Budget Variances Sales $603,252 $425,250 Number OF OU Less: Variable expenses Direct materials 144,368 79,380 Number OF OU Direct labour 136,634 94,500 Number OF OU Variable manufacturing overhead 38,670 34,020 Number U O Selling and administrative 20,790 F 23,202 Number OU Total variable expenses 342,874 228,690 Number OF OU 260,378 Contribution margin 196,560 F Number OU Less: Fixed expenses Manufacturing overhead 37,629 OF OU Number 38,500 Selling and administrative costs 20,797 24,100 Number OF OU Total fixed expenses 58,426 OF OU 62,600 Number Operating income / (loss) $201,952 $133,960 Number OF OU Part B: Flexible Budget and Performance Report Complete a flexible budget and flexible budget performance report for the month. Compute flexible variances as absolute numbers (i.e., insert as positive numbers) and for each variance indicate if it is favourable (F) or unfavourable (U). (1/2 mark each - 15 marks total) Flexible Budget Performance Report For the month ended October 31 Actual Result Flexible Budget Flexible Budget Variances Sales $603,252 Number Number OF OU Less: Variable expenses Direct materials 144,368 Number Number OF OU Direct labour 136,634 Number Number F OU Variable manufacturing overhead 38,670 Number Number OF OU Selling and administrative OF OU 23,202 Number Number Total variable expenses 342,874 Number OF OU Number Contribution margin 260,378 OF OU Number Number Less: Fixed expenses Manufacturing overhead 37,629 38,500 Number OF OU Selling and administrative costs 20,797 24,100 Number OF OU OF OU Total fixed expenses 58,426 62,600 Number O Operating income / (loss) $201,952 Number Number F OU
