Chapter 23: Q5RQ (page 1305)
Question: How is a flexible budget used?
Answer
A flexible budget isused for preparing the flexible budget performance report.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Matching terms
Match each term to the correct definition.
Terms Definitions
a. Flexible budget
b. Flexible budget variance
c. Sales volume variance
d. Static budget
e. Variance
1. A summarized budget for several levels of volume thatseparates variable costs from fixed costs.
2. A budget prepared for only one level of sales.
3. The difference between an actual amount and thebudgeted amount.
4. The difference arising because the company actuallyearned more or less revenue, or incurred more or lesscost, than expected for the actual level of output.
5. The difference arising only because the number ofunits actually sold differs from the static budget units.
Gunter Company reported the following manufacturing overhead variances.
Variable overhead cost variance | $320 F |
Variable overhead efficiency variance | 458 U |
Fixed overhead cost variance | 667 U |
Fixed overhead volume variance | 625 F |
24. Record the journal entry to adjust Manufacturing Overhead.
25. Was Manufacturing Overhead overallocated or underallocated?
Preparing a standard cost income statement Review your results from Problem P2333B.
Middleton’s actual and standard sales price per mug is $5. Prepare the standard cost income statement for July 2018.
Question: List the variable overhead variances, and briefly describe each
Download an Excel template for this problem online in MyAccountingLab or at http://www.pearsonhighered.com/Horngren. Pilchuck Company manufactures tote bags and has provided the following information for September 2018:
Units | Actual Results | Static Budget |
Static Budget | 11,000 | 12,000 |
Sales Revenue | \(368,000 | \)384,000 |
Variable Costs | 183,000 | 198,000 |
Contribution Margin | 185,000 | 186,000 |
Fixed Costs | 76,000 | 77,184 |
Operating Income | \(109,000 | \)108,816 |
What do you think about this solution?
We value your feedback to improve our textbook solutions.
