Fourth Street Muffins sells its muffins to restaurants and coffee houses for an average selling price of $30 per case. The following information relates to the budget for Fourth Street Muffins for this year:
Budgeted sales in cases ................. 8,000 cases
Packaging cost per case ......................... $ 2.00
Shipping expense per case ..................... $ 3.50
Sales commission expense ... 2% of sales price
Salaries expense (total) .......................... $5,900
Office rent (total) .................................. $3,800
Depreciation (total) ............................... $2,000
Insurance expense (total) ...................... $1,500
Office supplies expense (total) ............... $ 800
During the year, Fourth Street Muffins actually sold 8,100 cases resulting in total sales revenue of $251,400. Actual expenses (in total) from this year are as follows:
Packaging cost (total) .............................. $ 17,800
Shipping expense (total) .......................... $ 28,100
Sales commission expense (total) .............. $ 5,028
Salaries expense (total) .............................. $ 6,300
Office rent (total) ...................................... $ 3,200
Depreciation (total) .................................... $ 2,000
Insurance expense (total) ........................... $ 2,100
Office supplies expense (total) ..................... $ 600
Requirement
Construct a flexible budget performance report for Fourth Street Muffins for the year. Use Exhibit 10-12 as a guide. Be sure to indicate whether each variance is favorable (F) or unfavorable (U).