Suppl Note re Flexible Budget Budget Performance Report

# Required 1 complete the 5 column flexible budget

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Assume that there was no beginning or ending inventory. Required 1. Complete the 5-column Flexible Budget Performance Report based on the above information. 2. Prepare a reconciliation that explains the difference between Actual Operating Income and Static Budget Operating Income in terms of the various variances. Problem 4: (7-42) Variance analysis, solve for unknowns. Homerun Headgear manufactures and distributes baseball caps to ballparks and other sports venues. Homerun’s budget for 2008 forecasts sales of 600,000 caps. However, only 500,000 caps were sold. Based on the data provided in the table below, calculate the missing numbers and complete the analysis. Variance Analysis for Homerun Headgear for 2000, Incomplete Actual Results (1) Flexible-Budget Variances (2)=(1)-(3) Flexible Budget (3) Sales- Volume Variances (4)=(3)-(5) Static Budget (5) Units Sold 500,000 600,000 Revenue (Sales) \$5,000,000 \$4,800,000 Variable Costs 1,400,000 1,800,000

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4 Contribution Margin 1,100,000 F 500,000 U Fixed Costs 1,150,000 1,000,000 1,000,000 Operating Income Prepare a 5-column Flexible Budget Performance Report
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• Winter '12
• Farrar
• Variance, budget performance report, Mary Flanagan

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