Required:Prepare a flexible budget performance report that shows the company's revenue and spending varlances and activity variances forAugust. (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zerovarlance). Input all amounts as positive values.)Lavage RapideFiexible Budget Performance ReportFor the Month Ended August 31ActualResultsFlexibleBudgetPlanningBudgetCars washed8,100Revenue53,300Expenses:Cleaning supplies3,700Electricity2,030Maintenance2,240Wages and salaries7,960Depreciation8,300Rent2,400Administrative expenses1,940Total expense28,57024,730Net operating income Exercise 9-13 (Algo) Prepare a Flexible Budget Performance Report (LO9-4)Lavage Rapide is a Canadian company that owns and operates a large automatic car wash faclity near Montreal. The following tableprovides estimates concerning the company's costs:FixedCont per Cont perMonth Car Wanhed$ 0.40Cleaning wuppliesElectricity$ 1,500$0.07Maintenance$ 0.25$ 0.40Wages and nalariesDepreciationRentAdministrative expenses$ 4,400$ 8,300$ 2,200$ 1,800$0.03For example, electricity costs should be $1,500 per month plus $0.07 per car washed. The company expects to wash 8,000 cars inAugust and to collect an average of $6.40 per car washed.The actual operating results for August are as follows:Lavage RapideIncome StatementFor the Month Ended August 318,100$ 53,300Actual cars washedRevenueЕxpensesCleaning suppliesElectricityMaintenance3,7002,0302,2407,9608,3002,400Wages and salariesDepreciationRentAdministrative expensesTotal expense1,94028,570$ 24,730Net operating income

Answered: Image /qna-images/answer/1001322a-37df-4761-814c-8f1f958d3180.jpg

Prepare a flexible budget performance report that shows the company's revenue and spending varlances and activity varlances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values.)

Prepare a flexible budget performance report that shows the company's revenue and spending varlances and activity varlances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 7CE: Refer to Cornerstone Exercise 8.6. Required: 1. Calculate the total budgeted cost of units produced...

See similar textbooks

Similar questions

6.5 (LO 1) Preparing a performance report Refer to the information about Adarmes Adventures given in Exercise 6.4. Alexis King chose to prepare a static budget based on sales of 1,800 canoes. Actual sales were 1,850 canoes at a price of $640 each. The company incurred the following costs for the year: Direct material Direct labor Variable overhead Fixed overhead Total $413,700 205,200 167,800 150,000 $936,700 Required Prepare a performance report for the year that shows the flexible budget and sales volume variances.
II. Wongtien Electronics Corp. in Hong Kong, SAR, China, manufactures tablets, laptops and desktop PCs. Wongtien currently operates a standard absorption costing system. Budgeted information for next year is given below (currency in one thousand Hong Kong Dollars, HK$000): Desktop PCs 9,880 2,200 800 Products Sales revenue Tablets 3,640 800 300 Laptops 12,480 2,800 Total 26,000 5,800 2,300 Direct material Direct labor Fixed production overheads 1,456 1,084 4.992 3.488 3,952 2,928 10,400 7,500 Gross profit Fixed production overheads are currently absorbed based on a percentage of sales revenue. Wongtien is considering changing to an activity-based costing system. The main activities and their associated cost drivers and overhead cost have been identified as follows: Cost driver Production overhead cost Activity Manufacturing scheduling wNumber of orders Parts handling Assembly Software installation and testing Packaging 162 Number of parts Assembly time wNumber of software applications…
Task 2 (Budgeting) Aqua Safe produces water purifiers for domestic use. The production expenses for the production of 5,000 units of water purifiers in its factory is given in Table T2: Materials Labour Variable Overheads Fixed Overheads Table T2 Administrative Expenses (5% Variable) Selling Expenses (20% Fixed) Distribution Expenses (10% Fixed) Total Cost of Sales (for 5,000 units) 4200 2100 1400 900 1000 570 480 10650 You are required to prepare a flexible budget for the production of 7000 units and 14000 units of water purifiers.
TB Problem Qu. 10-240 (Algo) The following data have been provided by Lopus... The following data have been provided by Lopus Corporation: Budgeted production Standard machine-hours per unit Standard lubricants Standard supplies Actual production Actual machine-hours Actual lubricants (total) Actual supplies (total) 3,400 units Lubricants Supplies 3.5 machine-hours $ 5,00 per machine-hour $ 3.70 per machine-hour Variable Overhead Spending Variance 3,700 units 8,880 machine-hours Required: Compute the variable overhead spending variances for lubricants and for supplies. $46,084 $32,492 (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Rahapuka Ltd is a manufacturing company which manufactures and assembles car components. The following budgeted information relates to Rahapuka Ltd for the forthcoming period. Products A1 B2 C3 '000 '000 '000 Sales and production (units) 50 40 30 N$ N$ N$ Selling price (per unit) 45 95 73 Prime cost (per unit) 32 84 65 Hours Hours Hours Machine department (machine hours per unit) 2 5 4 Assembly department (direct labour hours per unit) 7 3 2 Overheads can be reanalyzed into cost pools as follows: Quantity for Cost pool N$000 Cost driver the period Machining services 357 Machine hours 420 000 Assembly services 318 Direct labour hours 530 000 Set up costs 26 Set up 520 Order processing 156 Customer orders 32 000 Purchasing 84 Suppliers orders 11 200 You have also been provided with the following estimates for the period A1 B2 C3 Number of set ups 120 200 200 Customer orders 8000 8000 16000 Suppliers orders 3000 4000 4000…
Rahapuka Ltd is a manufacturing company which manufacturers and assembles car components. The following budgeted information relates to Rahapuka Ltd for the forth coming period. Products A1 B2 C3 '000 '000 '000 Sales and production (units) 50 40 30 N$ N$ N$ Selling price (per unit) 45 95 73 Prime costs (per unit) 32 84 65 Hours Hours Hours Machine department (machine hours per unit) 2 5 4 Assembly department (direct labour hours per unit) 7 3 2 Overheads can be re-analysed into 'cost pools' as follows; cost pool N$ '000 Cost driver Quantity for the period Machining services 357 Machine hours 420.000 Assembly services 318 Direct labour hours 530.000 Set up costs 26 Set ups 520 Order processing 158 Customer orders 32.000 Purchasing 84 Suppliers' orders 11.200 You have also been provided with the following estimates for the period A1 B2 C3 Number of set ups 120 200 200 Customer orders 8000 8000 16000 Suppliers' orders 3000 4000 4200…
An electrical repair service company has produced the following budget for the year ahead: Office repairs House repairs Total £ £ Received from customers Variable costs Fixed costs (apportioned) Profit (loss) 45,000 (24,000) (7,000) 14,000 24,000 (18,000) (8,000) (2,000) 69,000 (42,000) (15,000) 12,000 The fixed costs, which relate to rent and insurance, will be incurred irrespective of the type of activity carried out. Which of the following decisions is supported by the information in the table? A) If the company ceases to carry out house repairs, it will increase total profit from 12,000 to 14,000 B) If the company ceases to carry out house repairs, it will increase total profit from 12,000 to 18,000 C) If the company ceases to carry out house repairs, it will reduce total profit from 12,000 to 6,000 D) If the company ceases to carry out house repairs, it will reduce total profit from 12,000 to 4,000
LO.5 (Flexible budget) Tom's Shoe Repair provides a variety of shoe repair services. Analysis of monthly costs revealed the following cost formulas when direct labor hours are used as the basis of cost determination:Supplies: y= $0 + S4.00XProduction supervision and direct labor: y $500+ $7.00XUtilities: y= $350 + $5.40XRent: y= $450+ $0.00XAdvertising: y = $75 + $0.00OXa. Prepare a flexible budget at 250, 300, 350, and 400 direct labor hours.b. Calculate a total cost per direct labor hour at each level of activity. c. Tom's emplovees usually work 350 direct labor hours per month. The average shoe repair requires 1.25 labor hours to complete. Tom wants to earn a 40 percent margin on his cost. What should be the average charge per customer, rounded to the nearest dollar to achieve Tom's profit objective?
TB Problem Qu. 9-401 (Algo) Cryan Jeep Tours operates jeep tours... Cryan Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Actual guests Actual jeeps Revenue Expenses: Revenue Tour guide wages. Vehicle expenses. Administrative expenses In May, the company budgeted for 497 guests and 202 jeeps. The company's income statement showing the actual results for the month appears below: Cryan Jeep Tours Income Statement For the Month Ended May 31 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income Guests Jeeps Revenue Expenses: Fixed element per month $0 $0 Tour guide wages Vehicle expenses Administrative expenses Total expense Net operating income $ 5,600 $ 2,100 512 197 $ 87,854 Required:…
Howard Cooper, the president of Finch Computer Services, needs your help. He wonders about the potential effects on the firm's net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal Year 1: Standard rate and variable costs Service rate per hour Labor cost Overhead cost Selling, general, and administrative cost. Expected fixed costs Facility maintenance Selling, general, and administrative Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 28,000 hours of services in Year 1. b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, if Finch charges customers $57 per hour, the firm can achieve 31,000 hours of services. Prepare a flexible budget using the consultant's assumption. c. The same consultant also suggests that if the firm…
Cryan Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Fixed elementper month Variable elementper guest Variable element per jeep Revenue $ 0 $ 157 $ 0 Tour guide wages $ 0 $ 0 $ 167 Vehicle expenses $ 5,000 $ 9 $ 64 Administrative expenses $ 1,500 $ 8 $ 0 In May, the company budgeted for 467 guests and 172 jeeps. The company's income statement showing the actual results for the month appears below: Cryan Jeep Tours Income Statement For the Month Ended May 31 Actual guests 482 Actual jeeps 167 Revenue $ 65,854 Expenses: Tour guide wages 28,357 Vehicle expenses 17,640 Administrative expenses 4,888 Total expense 50,885 Net operating…
4. Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. It has the following information to be used in preparing its flexible budget: The activity driver is the number of cars washed. The expected revenue per car wash is $4.9 The company expects to wash 9,000 cars in August The budgeted costs are as follows: Electricity is $1,200 per month plus $0.15 per car Depreciation is $6,000 per month Rent is $8,000 per month Cleaning supplies are $0.8 per car Labor cost is $4,000 per month and $0.30 per car Administrative expense is $5,000 per month and $0.30 per car The company actually washed 8,800 cars during the year. Actual results were as follows: Revenues were $40,800 Labor cost was $8,000 Administration was $5,000 Cleaning supplies were $7,400 Electricity was $2,650 What is the total profit in the planning budget for the month?