Exercise 10–17 (20 minutes)
Gelato Supremo
Revenue and Spending Variances
For the Month Ended July 31
Flexible
Budget
Actual
Results
Revenue and
Spending
Variances
Liters (q) ……………………………….
4,900
4,900
Revenue ($13.50q) ………………….
$66,150
$69,420
$3,270
F
Expenses:
Raw materials ($5.10q) ………….
24,990
26,890
1,900
U
Wages ($4,800 + $1.20q) ……….
10,680
11,200
520
U
Utilities ($1,860 + $0.15q) ………
2,595
2,470
125
F
Rent ($3,150) ………………………
3,150
3,150
0
Insurance($1,890) …………………
1,890
1,890
0
Miscellaneous ($540 + $0.15q) ..
1,275
1,390
115
U
Total expense …………………………
44,580
46,990
2,410
U
Net operating income ……………….
$21,570
$22,430
$ 860
F
Exercise 10–19 (45 minutes)
1. The planning budget appears below. Note that the report does not
include revenue or net operating income because the production
department is a cost center that does not have any revenue.
Triway Packaging Corporation
Production Department Planning Budget
For the Month Ended November 30
Budgeted labor-hours (q) ………………………..
4,000
Direct labor ($16.30q) …………………………….
$ 65,200
Indirect labor ($4,300 + $1.80q) ……………….
11,500
Utilities ($5,600 + $0.70q) ……………………….
8,400
Supplies ($1,400 + $0.30q) ……………………..
2,600
Equipment depreciation ($18,600 + $2.80q) ..
29,800
Factory rent ($8,300) ……………………………..
8,300
Property taxes ($2,800) …………………………..
2,800
Factory administration ($13,400 + $0.90q) ….
17,000
Total expense ……………………………………….
$145,600
2. The flexible budget appears below. Like the planning budget, this report
does not include revenue or net operating income because the
production department is a cost center that does not have any revenue.
Triway Packaging Corporation
Production Department Flexible Budget
For the Month Ended November 30
Actual labor-hours (q) …………………………….
3,800
Direct labor ($16.30q) …………………………….
$ 61,940
Indirect labor ($4,300 + $1.80q) ……………….
11,140
Utilities ($5,600 + $0.70q) ……………………….
8,260
Supplies ($1,400 + $0.30q) ……………………..
2,540
Equipment depreciation ($18,600 + $2.80q) ..
29,240
Factory rent ($8,300) ……………………………..
8,300
Property taxes ($2,800) …………………………..
2,800
Factory administration ($13,400 + $0.90q) ….
16,820
Total expense ……………………………………….
$141,040
