Question

Brodrick Company expects to produce 20,000 units for the year ending December 31. A flexible budget for 20,000 units of production reflects sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. The company instead produces and sells 26,000 units for the year. Assume that actual sales are $480,000, actual variable costs for the year are $112,000, and actual fixed costs for the year are $145,000.
Prepare a flexible budget performance report for the year.

Answer 1

Answer:

Flexible budget performance report for the year

Sales ($400,000 / 20,000 × 26,000)                         $520,000

Less Variable Costs ($80,000 / 20,000 × 26,000)   ($104,000)

Less Fixed costs                                                           ($150,000)

Budgeted Income / (Loss)                                            $266,000

Explanation:

A flexed Budget is a Master Budget that has been adjusted to the Actual number of units produced and sold instead of Budgeted Units.

Note : Fixed Costs will the the same under the Master Budget and the Flexed Budget.