Burchard's Freight and Haulage is a small trucking company in northern New South Wales. Basic bookkeeping...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Burchard's Freight and Haulage is a small trucking company in northern New South Wales. Basic bookkeeping tasks have previously been performed by a person with minimal training. Because of the growth of the business you have recently been appointed as accountant. The company's manager, Bob Burchard, has prepared the following performance report for May. Burchard's Freight and Haulage Performance report for the month ending 31 May Actual Static Budget Variance Revenue from haulage 105 000 110 000 5 000 U less Variable expenses Fuel Vehicle maintenance Drivers' wages Other operating expenses 15 950 15 700 23 500 12 500 25 200 250 u 1 500 F 200 F 1 850 F 3 300 F 22 000 12 300 23 350 Total variable expenses 73 600 76 900 Contribution margin 31 400 33 100 1 700 U less Fixed expenses Depreciation on vehicles Cleaning Supervisory salaries Other operating expenses 2 700 900 8 100 2 600 100 U 800 8 000 9 900 100 U 100 U 11 600 1 700 U Total fixed expenses 23 300 21 300 2 000 U Net profit 8 100 11 800 3 700 U Required 1. Prepare a columnar flexible budget for Burchard's Freight and Haulage based on revenue levels of $90 000, $100 000 and $110 000. 2. What is the flexible budget equation? 3. Prepare a detailed perforhance report which will show activity volume variances and flexible budget varlances, item by item. 4. Although there are a number of favourable variances In Bob Burchard's report, actual net profit is only about 65% of budgeted net profit. Explain why this is so. Burchard's Freight and Haulage is a small trucking company in northern New South Wales. Basic bookkeeping tasks have previously been performed by a person with minimal training. Because of the growth of the business you have recently been appointed as accountant. The company's manager, Bob Burchard, has prepared the following performance report for May. Burchard's Freight and Haulage Performance report for the month ending 31 May Actual Static Budget Variance Revenue from haulage 105 000 110 000 5 000 U less Variable expenses Fuel Vehicle maintenance Drivers' wages Other operating expenses 15 950 15 700 23 500 12 500 25 200 250 u 1 500 F 200 F 1 850 F 3 300 F 22 000 12 300 23 350 Total variable expenses 73 600 76 900 Contribution margin 31 400 33 100 1 700 U less Fixed expenses Depreciation on vehicles Cleaning Supervisory salaries Other operating expenses 2 700 900 8 100 2 600 100 U 800 8 000 9 900 100 U 100 U 11 600 1 700 U Total fixed expenses 23 300 21 300 2 000 U Net profit 8 100 11 800 3 700 U Required 1. Prepare a columnar flexible budget for Burchard's Freight and Haulage based on revenue levels of $90 000, $100 000 and $110 000. 2. What is the flexible budget equation? 3. Prepare a detailed perforhance report which will show activity volume variances and flexible budget varlances, item by item. 4. Although there are a number of favourable variances In Bob Burchard's report, actual net profit is only about 65% of budgeted net profit. Explain why this is so.
Expert Answer:
Answer rating: 100% (QA)
Answer Static Budget FLEXIBLE BUDGET Variable Fixed Revenue from Haulage 11000000 9000000 10000000 11000000 Variable Expense Fuel 1570000 1427 1284545 1427273 1570000 Vehicle Maintenance 2350000 2136 ... View the full answer
Related Book For
Managerial Decision Modeling with Spreadsheets
ISBN: 978-0136115830
3rd edition
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair
Posted Date:
Students also viewed these accounting questions
-
Because of the growth of high-powered, low-cost computing, wireless communications and technologies such as videoconferencing, many managers soon may not need to come into the office to do their...
-
Majestic Trucking Inc. (Majestic) is a small trucking company that carries freight between centres in central Canada and the northeastern United States. The Mozart family of Cobourg owns Majestic,...
-
You have recently been appointed as supply chain manager for a pharmaceutical company. Summarize the main Internet-based applications you would consider for communicating with your suppliers.
-
A flat and infinitely large sheet with uniform charge density moves with constant speed in a direction parallel to its surface. Confirm the differential form of Poyntings theorem at every point not...
-
Marks and Spencer is one of the United Kingdom's largest retailers, with over 600 stores in the U.K. and another 300 located internationally, selling clothing, home products, and food. The data in...
-
Discuss the two views of the right side of the accounting equation.
-
Explain why collaborative filtering is such a useful technique. How successful do you believe it can be? What might limit its efficacy?
-
Packer Concrete Company pours concrete slabs for single-family dwellings. Wolff Construction Company, which operates outside Packers normal sales territory, asks Packer to pour 40 slabs for Wolffs...
-
Summaries models and methods of communications management in context of project life cycle and other project management functions. How would i include a real life example in to this answer?
-
Reconstruct the following syllogistic forms and use the five rules for syllogisms to determine if they are valid from the Boolean standpoint, conditionally valid from the Aristotelian standpoint, or...
-
What is the current proposed minimum salary an Exempt Executive employee can earn in this region of NYS?
-
Andretti Company has a single product called a Dak. The company normally produces and sells 8 3 , 0 0 0 Daks each year at a selling price of $ 5 4 per unit. The company s unit costs at this level of...
-
Bench Industries manufactures large workbenches for industrial use. Recent market analysis indicates that sales are declining for Bench's product because of aggressive competitor pricing. Bench's...
-
What key variances should EcoChic Handbags monitor to ensure profitability and sustainability?
-
what does it mean when a company decides to increase the number of shares reserved for issuance thereunder by 13,000,000 shares?
-
Minnesota Manufacturing has an opportunity to export 2 , 0 0 0 units of its product to a foreign country. The current selling price is $ 1 6 9 , but the special order will be sold at a unit price of...
-
Is the State conformal with the IRS in regards to the above-the-line deduction for out-of-pocket expenses for eligible educators?
-
The ultimate goal of Google, Bing, and other consumer search engines is to provide users with search listings that contain useful information on the topic of their search. What recommendations would...
-
What is a queuing problem? What are the components in a queuing system?
-
A manufacturer has acquired four small assembly plants, located in Charlotte, Tulsa, Memphis, and Buffalo. The plan is to remodel and keep two of the plants and close the other two. The table at the...
-
Customers arrive at an automated coffee vending machine at a rate of 4 per minute, following a Poisson distribution. The coffee machine dispenses a cup of coffee at a constant rate of 10 seconds. (a)...
-
Water is to be used to absorb acetone from a dilute mixture with air in a tower packed with 3.5-in. metal Pall rings. Average conditions in the tower are: \[\text { Temperature }=25^{\circ}...
-
Propane gas at \(300 \mathrm{psia}\) and \(150^{\circ} \mathrm{F}\) is sent to an expansion turbine with an efficiency of \(80 \%\). What is the lowest outlet pressure that can be achieved without...
-
Liquid oxygen is stored in a tank at \(-298^{\circ} \mathrm{F}\) and 35 psia. It is to be pumped at \(100 \mathrm{lb} / \mathrm{s}\) to a pressure of \(300 \mathrm{psia}\). The liquid oxygen level in...
Study smarter with the SolutionInn App