P1. Fixed Budget vs Flexible Budget. Quail Company reports the following actual selected financial results for May. Sales (101,500 units) . . . . . . . $ 637,000 Variable costs . . . . . . . . . . . . 356,250 Fixed costs . . . . . . . . . . . . . . 150,000 Assume the same company had budgeted the following for the same month. Sales (100,000 units) . . . . . . . $ 627,000 Variable costs . . . . . . . . . . . . 351,000 Fixed costs . . . . . . . . . . . . . . 150,000 Part 1. Prepare a fixed budget performance report for the month using the template below. Make sure you calculate each variance and indicate whether the variance is favorable (F) or unfavorable (U). Quail Co. Fixed Budget Performance Report For Month of May Fixed Actual Budget Results Variance F or U? Sales (in units) Sales Variable costs ------------------------------------------------- Contribution Margin Fixed costs ------------------------------------------------- Income from Operations ============================= Part 2. Use the following information to prepare flexible budgets for Quail Co. for the month of June. Prepare flexible budgets for sales volume of 100,000, 110,000 and 120,000 units. Use the template below. Sales per unit $6.27 Variable costs per unit $3.51 Total fixed costs $150,000 Quail Co. Flexible Budgets Performance Report For Month of June Flexible Budget for Unit Sales of 100,000 110,000 120,000 Sales Variable costs ---------------------------------------------------------- Contribution Margin Fixed costs ---------------------------------------------------------- Income from Operations ============================= Part 3. Assume the companys sold 110,000 units for June. Use the flexible budget for this number of units that you calculated as part of Part 2 of this problem. Also assume that actual sales for the same month were $691,000, actual variable costs $387,000 and fixed costs were 149,000. Prepare a flexible budget performance report for the month of June. Use the template below. Make sure you calculate each variance and indicate whether the variance is favorable (F) or unfavorable (U). Quail Co. Flexible Budget Performance Report For Month of June Flexible Actual Budget Results Variance F or U? Sales (in units) 110,000 110,000 0 Sales Variable costs ------------------------------------------------------ Contribution Margin Fixed costs ------------------------------------------------------ Income from Operations ============================

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