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Brodrick Company expects to produce 21,000 units for the year ending December 31. A flexible budget for 21,000 units of production reflects sales of $504,000; variable costs of $63,000; and fixed costs of $141,000. Assume that actual sales for the year are $595,600 (26,900 units), actual variable costs for the year are $114,000, and actual fixed costs for the year are $133,000. Prepare a flexible budget performance report for the year.

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Answer:

Brodrick Company

Flexible Budget Performance Report for the year ended December 31

                                 Flexible        Actual          Variance

                                 Budget        Budget        

Sales unit                 21,000           26,900          5,900 units F

Sales revenue    $645,600      $595,600     $50,000 U

Variable costs         80,700          114,000        33,300 U

Fixed costs             141,000         133,000          8,000 F

Total costs          $221,700      $247,000      $25,300 U

Profit                  $423,900      $348,600      $75,300 U

Explanation:

a) Data and Calculations:

Flexible Budget for 21,000 units

Sales revenue = $504,000

Variable cost = $63,000

Fixed costs = $141,000

Flexing the budget with 26,900 units:

Sales revenue = $645,600 ($504,000/21,000 * 26,900)

Variable costs = $80,700 ($63,000/21,000 * 26,900)

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