Each barbecue is sold for $5.00, and each balloon is sold for $2.00. Throughout the two weekend days, the four friends were able to sell 300 barbecues and 170 balloons. The four friends did not have to bother about the stock of sausage and bread or balloons; they arranged with a supplier and had to pay only $0.25 per barbecue served (a slice of bread and a sausage) and $0.07 for each balloon.

Table 2 Actual Results

Actual Results Sales $1,800

Variable expenses: Cost of goods sold Direct materials $95

Total variable expenses $95

Contribution margin $1,705

Fixed expenses:

Manufacturing overhead

Labour $800

Lease of BBQ $400 Lease of balloon pump $50

Selling and administrative expenses

Lease of gazebo $100

Stand permit $250

Total fixed expenses $1,600

Net operating income $105

The invoices indicate the four friends bought $85 in bread and sausage and $10 in balloons. Notably, there was some wastage as the records also show the enterprise has used 310 barbecue serves (bread and sausage) and 180 balloons and there is no stock left.

Prepare the planning budget using an expected level of activity of selling 300 barbecues and 200 balloons and compare the planning budget with the actual results and identify the sales-volume variance and the flexible-budget variance.