Pleasant View Farms raises beef cattle and measures its output on the number of cows sold. The firm managers provided the following fixed and variable costs estimates that they use for budgeting purposes and the actual results for the year:

Fixed Element per year Variable Element per Cow sold Actual Total for May

Sales 2,000.00 57,000.00

Wages 10,000.00 100.00 15,000.00

Feed 10,000.00 500.00 24,500.00

Rent 4,000.00 6,000.00

Insurance 2,000.00 10.00 2,290.00

Property Tax 6,000.00 6,500.00

When preparing its planning budget, the farm estimated that it would sell 25 cows during the year; however, during 2020 the farm actually sold 29 cows.

Planning Activity Variance U/F Flex Revenue/Spend Variance U/F Actuals

Activity

Sales/Revenues

Less expenses

Net Income

Requirements:

1 Complete the table above to show the planning budget, flex budget, actuals and all variances, denoting favorable or unfavorable.

6. What was the projected net income of the Flex budget?
7. What is the revenue variance?
8. What is the expense for Feed in the Planning Budget?

i. Which, if any, expenses had favorable variances?

j. Which expenses were deemed only variable?