Prepare a columnar flexible budget for Walcker Transportation at revenue levels of $12,600,000, $13,000,000, and $13,400,000. Use the format of the last three columns. Assume that the prices and mix of products sold are equal to the budgeted prices and mix.

Part 1 fill in the blanks below

Revenue	$12,600	$13,000	$13,400
Fuel		$520	$536
Repairs and maintenance	378		402
Supplies and miscellaneous	2,016	2,080	2,144
Variable payroll	7,812	8,060	8,308
Total variable costs
Supervision	$160	$160	$160
Rent	200	200	200
Depreciation	460	460	460
Other fixed costs	170	170	170
Total fixed costs	$990	$990	$990
Total costs
Operating income

Part 2 Write out the flexible budget formula for costs as a function of revenue.

Cost = _________________ + __________ x Revenue

Problem 8-A1 - continued

Part 3 Fill in the blanks below

Prepare a condensed table showing the static budget variance, the sales-activity variance, and the flexible-budget variance.

	(1) Actual Results at Actual Activity Level	(2) =(1)-(3) Flexible- Budget Variances	(3) Flexible Budget for Actual Sales Activity	(4) =(3)-(5) Sales- Activity Variances	(5) Static Budget
Net revenue
Total variable costs
Contribution margin
Fixed costs
Operating income

Budget Actual Variance 30000 $127000 000 300,000 U Net revenue Variable Costs Fuel Repairs and maintenance Supplies and miscellaneous Variable payroll 520,000 390,000 2,080,000 8,060,000 S 516,000 398,000 2,070,000 7,940,000 S10,924,000 s 4,000 F 8,000 U 10,000 F 120,000 F Total variable costs Fixed Costs 511,050,000 0924000 126,000F 177,000 200,000 460,000 163,000 17,000 U Supervision Rent Depreciatiorn Other fixed costs 160,000 200,000 460,000 70,000 Total fixed costs Total fixed and variable costs Operating income 990,000 1,00,000 120400000 11924000 7,000 F S 10,000 U S116,000 F 184,000 U S11,924,00 S 960,000 776,000