Divine Muffins sells its muffins to restaurants and coffee houses for an average selling price of $31 per case. The following information relates to the budget for Divine Muffins for this year (all figures are annual totals unless otherwise noted): Budget information: Budgeted sales in cases. . . . . . 9,300 cases Packaging cost per case. . . . . . $5 Shipping expense per case. . . . $1 Sales commission expense. . . . 3% of sales price Salaries expense. . . . . . . . . . . . $6,800 Office rent. . . . . . . . . . . . . . . . . $3,100 Depreciation. . . . . . . . . . . . . . . $2,900 Insurance expense. . . . . . . . . . $2,300 Office supplies expense. . . . . . $1,300 Actual expenses: Packaging cost. . . . . . . . . . . . . . $50,600 Shipping expense. . . . . . . . . . . . $10,900 Sales commission expense. . . . . $9,423 Salaries expense. . . . . . . . . . . . . $8,400 Office rent. . . . . . . . . . . . . . . . . . $3,100 Depreciation. . . . . . . . . . . . . . . . $2,900 Insurance expense. . . . . . . . . . . $1,900 Office supplies expense. . . . . . . $1,800 During the year, Divine Muffins actually sold 9,900 cases, resulting in total sales revenue of $314,100. Requirement: Construct a flexible budget performance report for DivineMuffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).

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 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...

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Divine Muffins sells its muffins to restaurants and coffee houses for an average selling price of $31 per case. The following information relates to the budget for Divine Muffins for this year (all figures are annual totals unless otherwise noted):

Budget information:

Budgeted sales in cases. . . . . .	9,300 cases
Packaging cost per case. . . . . .	$5
Shipping expense per case. . . .	$1
Sales commission expense. . . .	3% of sales price
Salaries expense. . . . . . . . . . . .	$6,800
Office rent. . . . . . . . . . . . . . . . .	$3,100
Depreciation. . . . . . . . . . . . . . .	$2,900
Insurance expense. . . . . . . . . .	$2,300
Office supplies expense. . . . . .	$1,300

Actual expenses:

Packaging cost. . . . . . . . . . . . . .	$50,600
Shipping expense. . . . . . . . . . . .	$10,900
Sales commission expense. . . . .	$9,423
Salaries expense. . . . . . . . . . . . .	$8,400
Office rent. . . . . . . . . . . . . . . . . .	$3,100
Depreciation. . . . . . . . . . . . . . . .	$2,900
Insurance expense. . . . . . . . . . .	$1,900
Office supplies expense. . . . . . .	$1,800

During the year, Divine Muffins actually sold 9,900 cases, resulting in total sales revenue of $314,100.

Requirement:

Construct a flexible budget performance report for DivineMuffins for the year. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).

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