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Homework answers / question archive / Multiseal Paving & Waterproofing provides knowledge and expertise within a range of specialized divisions, focusing on high-rise building envelope, infrastructure, waterproofing, parking deck, restoration and decorative improvements
Multiseal Paving & Waterproofing provides knowledge and expertise within a range of specialized divisions, focusing on high-rise building envelope, infrastructure, waterproofing, parking deck, restoration and decorative improvements. The company uses flexible budget to control its administrative expenses. The variable admin costs and their relation to the sales are printing 1.5%, order processing 5%, and freight 4%. The monthly fixed admin expenses include supervisor salary $6,000, office rent $3,400 and insurance $800. Monthly sales are expected to range from $125,000 to $150,000. In July 2019, the actual sales were $140,000 and the actual administrative expenses were as follows: printing $2,450, order processing $7,000, and freight $6,200. In addition, the fixed administrative costs were supervisor salary $6,150, office rent $3,500 and insurance $750. Instructions Prepare a flexible budget performance report by usihg the above information.
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Multiseal paving and Waterproofing Flexible budget performance report |
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| Actual results [A] | Flexible budget [B] | Variance [A-B] | |
| Actual sales | 140000 | 140000 | |
| Variable cost | |||
| Printing | 2450 | 140000*1.5%= 2100 | 350 U |
| Order processing | 7000 | 140000*5%= 7000 | 0 No effect /None |
| Freight | 6200 | 140000*4%=5600 | 600 U |
| Total variable cost [i] | 15650 | 14700 | 950 U |
| Fixed cost | |||
| Supervisor salary | 6150 | 6000 | 150 U |
| Office rent | 3500 | 3400 | 100 U |
| Insurance | 750 | 800 | -50 F (enter as 50 F as positive value] |
| Total fixed cost [ii] | 10400 | 10200 | 200 U |
| Total cost | 26050 | 24900 | 1150 U |
