Req. 4,5, 6

A Data Table Actual vs. Budget Performance Report For the Month Ended August 31 Master Budget Master Budget Actual Variance 53,000 Sales volume (number of cases sold) Sales revenue 155,800 $ 137 800 68.900 Less: Variable expenses Contribution margin $ 76 400 $ 68.200 8 200 S 68.900 67 000 Less: Fixed expenses Operating income 1.900 Done 4. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.) 5. Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated, and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 55,000 units and the budgeted sales volume of 53,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 48,000 to 70,000 units 6. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions How much of the master budgetariance (calculated in Requirement 4) for operating income is due to volume being higher than expected? How much of the master budget variance for variable expenses is due to some cause other than volume? c. What could account for the flexible budget variance for sales revenue? d. What is the volume variance for fixed expenses? Why is it this amount? b. Flexible Master Flexible Budget Variance Volume Variance Master Budget 53,000 Budget Variance Budget 55,000 $ F $ 137,800 68.900 Actual 55.000 155,800 79.400 76,400 68 200 8.200 Sales volume Sales revenue Less: Variable expenses Contribution margin Less Fixed expenses 68900 18000 F 10500 u 7500 F 1.200 u 6300 F 68900 67.000 68,900 67.000 1.900 Operating income Choose from any list or enter any number in the input fields and then click Check