E9-6
Gourmand Cooking School
Flexible Budget Performance Report
For the Month Ended September 30
Actual Revenue and Flexible Activity Planning
Results Spending Budget Variances budget
variances
Courses (q1) 3 3 3
Students (q2) 42 42 45
Revenue $32,400 $1200 U $33,600 $2400 U $36,000
(800q2)
Expenses
Instructor 9080 160 F 9240 0 9240
wages (3080
q1)
Classroom 8540 2380 F 10920 780 F 11700
supplies
(260q2)
Campus rent 4200 0 4200 0 4200
($4,200)
Insurance 1890 0 1890 0 1890
Administrative 3790 307 U 3483 792 F 31785
expenses
(3270 +15q1
+4q2)
Total expense 29030 1963 F 30993 792 F 31785
NOI $3370 $763 F $2607 $1608 U $4215
E9-7
Jake’s Roof Repair
Activity Variances
For the month ended May 31
Flexible Budget Planning Budget Activity Variances
Repair-hours (q) 2900 2800
Revenue( $44,5q) $129050 $124600 $4450 F
Expenses:
Wages and salaries 70470 68840 1630 U
($23200+ $16,3q)
Parts and supplies 24940 24080 860 U
Equipment 2760 2720 40 U
depreciation( 1600 +
0,4q)
Truck operating 11330 11160 170 U
expenses (6400 +
1,7q)
Rent 3480 3480 3480
Administrative 6820 6740 80 U
expenses (4500 +
0,8q)
Total expense 119800 117020 2780 U
NOI $9250 $7580 $1670 F
E9-12
Lavage Rapide
Revenue and Spending Variances
For the Month Ended August 31
Actual Results Flexible Budget Revenue and
Spending Variances
Cars washed (q) 8800 8800
Revenue (4,9q) $43080 $43120 40 U
Expenses:
Cleaning supplies 7560 7040 520 U
(0,8q)
Electricity (1200 + 2670 2520 150 U
0,15q)
Maintenance (0,2q) 2260 1760 500 U
Wages and salaries 8500 7640 860 U
(5000 + 0,3q)
Depreciation 6000 6000 6000
Rent 8000 8000 8000
Administrative 4950 4880 70 U
expenses ( 4000 +
0,1q)
Total expense 39940 37840 2100 U
NOI $3140 $5280 $2140 U
E9-14
Packaging Solutions Corporation
Production Department Planning Budget
For the Month Ended March 31
Budgeted labor-hours (q) 8,000
Direct labor ($15.80q) $126,400
Indirect labor ($8,200 + 21,000
$1.60q)
Utilities ($6,400 + $0.80q) 12,800
Supplies ($1,100 + $0.40q) 4,300
Equipment depreciation 52,600
($23,000 + $3.70q)
Factory rent 8,400
Property taxes 2,100
Factory administration 26,900
($11,700 + $1.90q)
Total expense $254,500
Packaging Solutions Corporation
Production Department Flexible Budget
For the Month Ended March 31
Actual labor-hours (q) 8,400
Direct labor ($15.80q) $132,720
Indirect labor ($8,200 + 21,640
$1.60q)
Utilities ($6,400 + $0.80q) 13,120
Supplies ($1,100 + $0.40q) 4,460
Equipment depreciation 54,080
($23,000 + $3.70q)
Factory rent 8,400
Property taxes 2,100
Factory administration 27,660
($11,700 + $1.90q)
Total expense $264,180
Packaging Solutions Corporation
Flexible Budget Performance Report
For the Month Ended March
Actual Spending Flexible Activity Planning
Results variances Budget Variances budget
Labor hours 8,400 8,400 8,000
(q)
Direct labor $134,730 $2010 U $132,720 $6320 U $126,400
($15.80q)
Indirect labor 19860 1780 F 21,640 640 U 21,000
($8,200 +
$1.60q)
Utilities 14570 1450 U 13,120 320 U 12,800
($6,400 +
$0.80q)
Supplies 4980 520 U 4,460 160 U 4,300
($1,100 +
$0.40q)
Equipment 54080 0 54,080 1480 U 52,600
depreciation
($23,000 +
$3.70q)
Factory rent 8700 300 U 8,400 0 8,400
Property taxes 2100 0 2,100 0 2,100
Factory 26470 1190 F 27,660 760 U 26,900
administratio
n (11700 +
1,90q)
Total expense $265490 $1310 U $264,180 $9680 U $254,500
I believe that the overall unfavorable activity variance of $9,680, which is resulted from actual
labor hours exceeding the budgeted level of activity. If this higher activity level was due to
increased orders or sales, the production manager should not be responsible for this. However,
the overall unfavorable spending variance of $1,310 can be a concern to management.
Consequently, it is important to understand why both favorable and unfavorable spending
variances occurred. Eventaully, the $520 unfavorable variance in supplies should also be
investigated as it shows a 11,7% deviation from the expected cost, which could indicate cost
control inefficiencies
