Fulton Company manufactures book bags and has provided the following information for June 2018: EB(C
Fulton Company manufactures book bags and has provided the following information for June 2018: EB(Click the icon to view the information.) Requirements Prepare a flexible budget performance report. (Hint: You will need to calculate the flexible budget amounts for 10,000 units.) 1. As the company owner, which employees would you praise or criticize after you analyze this performance report? 2. Requirement 1. Prepare a flexible budget performance report. (Hint: You will need to calculate the flexible budget amounts for 10,000 units.) (Enter a “O” for any zero balances. For any $0 variances, leave the Favora (F)/Unfavorable (U) input blank. Enter all amounts as positive values.) Fulton Company X Data Table Flexible Budget Performance Report For the Month Ended June 30, 2018 1 2 3 4 5 Static Budget Actual Results (1) (3) (3) – (5) 10,000 Units 11,000 Budget Flexible Sales Sales Revenue 99,000 94,000 $ Budget Actual Flexible Volume Static Amounts 51,200 55,000 Variable Expenses Per Unit Variance Results Budget Variance Budget Contribution Margin 42,800 44,000 Units 15,000 16,000 Fixed Expenses Sales Revenue $ 27,800 $ 28,000 Operating Income Variable Expenses Contribution Margin Print Fixed Expenses Done Data Table Fulton Company manufactures book bags and has provided the following information for June 2018: EB(Click the icon to view the information.) Requirements Static Budget Actual Results Prepare a flexible budget performance report. (Hint: You will need to calculate the flexible budget amounts for 10,000 units.) As the company owner, which employees would you praise or criticize after you analyze this performance report? 1. Units 11,000 10,000 2. Sales Revenue 94,000 $ 99,000 Operating Income 51,200 55,000 Variable Expenses Contribution Margin 42,800 44,000 15,000 16,000 Fixed Expenses $ 27,800 $ 28,000 Operating Income Print Done Requirement 2. As the company owner, which employees would you praise or criticize after you analyze this performance report? O A. The sales volume variance for fixed costs most likely is a result of delaying a scheduled overhaul of equipment that altered the fixed expenses in the short term but will increase the company's costs in the long run. Since the engineering department is responsible for fixed costs, the manager of that department would be praised if the variance is unfavorable or criticized if the variance is favorable O B. The sales volume variance for operating income could be due to the effectiveness of the sales staff, or it could be due to a long period of snow that made it difficult for employees to get to work, bringing work to a standstill. To encourage sales, the sales staff should be praised and to encourage higher production levels, the manager of the production department should be criticized O C. More information is needed to determine which employees to praise or criticize. As the company owner, you should determine the causes of the variances before praising or criticizing employees. It is especially important to determine whether the variance is due to factors the managers can control. Wise managers use variances to raise questions and direct attention, not to fix blame. D. The flexible budget variance for fixed costs is most likely due to a change in a cost such as insurance premiums. Since the production department is responsible for fixed costs, the manager of that department would be praised if the variance is unfavorable or criticized if the variance is favorable