{"id":167,"date":"2024-09-27T17:48:59","date_gmt":"2024-09-27T17:48:59","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/chapter\/flexible-budget-performance-report\/"},"modified":"2024-10-01T20:19:32","modified_gmt":"2024-10-01T20:19:32","slug":"flexible-budget-performance-report","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/chapter\/flexible-budget-performance-report\/","title":{"raw":"Flexible Budget Performance Report","rendered":"Flexible Budget Performance Report"},"content":{"raw":"<section class=\"textbox learningGoals\" aria-label=\"Learning Goals\">\r\n<ul>\r\n \t<li>Prepare a flexible budget performance report<\/li>\r\n<\/ul>\r\n<\/section>&nbsp;\r\n\r\nFor the flexible budget performance report, the flexible budget is prepared using the ACTUAL level of production instead of the budgeted activity. The difference between actual costs incurred and the flexible budget amount for that same level of operations is the budget variance. Budget variances can indicate a department\u2019s or company\u2019s degree of efficiency since they emerge from a comparison of what was with what should have been. The performance report shows the budget variance for each line item. We\u2019re preparing this performance report on a summary basis for an entire year, but a company might prepare this kind of report using more detail and presenting it on a monthly basis.\r\n<div align=\"left\">\r\n<table class=\"fin-table gridded\"><caption class=\"u-clearfix\">\r\n<div>RockChuck Company<\/div>\r\n<div>Flexible Budget Performance Report<\/div>\r\n<div>Month Ended September 30, 2021<\/div>\r\n<\/caption>\r\n<thead>\r\n<tr>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\"><\/th>\r\n<th class=\"c highlight\" rowspan=\"2\" scope=\"col\">Actual Results<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Flexible Budget Variance<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">F or U<\/th>\r\n<th class=\"c highlight\" rowspan=\"2\" scope=\"col\">Flexible Budget<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">Sales Volume Variance<\/th>\r\n<th class=\"c\" rowspan=\"2\" scope=\"col\">F or U<\/th>\r\n<th class=\"c highlight\" rowspan=\"2\" scope=\"col\">Static Budget<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>Units<\/td>\r\n<td class=\"r highlight\">180,000<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r highlight\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 180,000<\/td>\r\n<td><\/td>\r\n<td><\/td>\r\n<td class=\"r highlight\">\u00a0 \u00a0 \u00a0 \u00a0 172,405<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Sales Revenue<\/td>\r\n<td class=\"r highlight\">$6,030,000<\/td>\r\n<td class=\"r highlight\">$\u00a0 \u00a0(90,000)<\/td>\r\n<td class=\"r highlight\">U<\/td>\r\n<td class=\"r highlight\">$6,120,000<\/td>\r\n<td class=\"r highlight\">$ \u00a0 258,230<\/td>\r\n<td class=\"r highlight\">F<\/td>\r\n<td class=\"r highlight\">$ 5,861,770<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Variable Costs<\/td>\r\n<td class=\"r highlight\">3,420,000<\/td>\r\n<td class=\"r highlight\">$ \u00a0 \u00a0 57,600<\/td>\r\n<td class=\"r highlight\">U<\/td>\r\n<td class=\"r highlight\">3,362,400<\/td>\r\n<td class=\"r highlight\">$ \u00a0 141,875<\/td>\r\n<td class=\"r highlight\">U<\/td>\r\n<td class=\"r highlight\">3,220,525<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Contribution Margin<\/td>\r\n<td class=\"r highlight\">2,610,000<\/td>\r\n<td class=\"r highlight\">$\u00a0 (147,600)<\/td>\r\n<td class=\"r highlight\">U<\/td>\r\n<td class=\"r highlight\">2,757,600<\/td>\r\n<td class=\"r highlight\">$ \u00a0 116,355<\/td>\r\n<td class=\"r highlight\">F<\/td>\r\n<td class=\"r highlight\">2,641,245<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Fixed Costs<\/td>\r\n<td class=\"r highlight\">2,650,000<\/td>\r\n<td class=\"r highlight\">$ \u00a0 \u00a0197,306<\/td>\r\n<td class=\"r highlight\">U<\/td>\r\n<td class=\"r highlight\">2,452,694<\/td>\r\n<td class=\"r highlight\">$\u00a0 \u00a0 \u00a0 \u00a0 \u00a0-<\/td>\r\n<td class=\"r highlight\">N\/A<\/td>\r\n<td class=\"r highlight\">2,452,694<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Operating Income<\/td>\r\n<td class=\"r highlight line-double\">$ (40,000)<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r highlight\">$\u00a0 (344,906)<\/td>\r\n<td class=\"r highlight line-double\">U<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r highlight line-double\">$\u00a0 304,906<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r highlight\">$ \u00a0 116,355<\/td>\r\n<td class=\"r highlight line-double\">F<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r highlight line-double\">$\u00a0 \u00a0188,551<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n&nbsp;\r\n\r\nThe overall budget was unfavorable:\r\n<div align=\"left\">\r\n<table class=\"fin-table acctstatement fw\">\r\n<thead>\r\n<tr class=\"u-sr-only\">\r\n<th scope=\"col\">Description<\/th>\r\n<th scope=\"col\">Total<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>Price\/Cost Variance<\/td>\r\n<td class=\"r\">$\u00a0 (344,906)<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Volume Variance<\/td>\r\n<td class=\"r\">116,355<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Overall budget variance<\/td>\r\n<td class=\"r line-double highlight\">$\u00a0 (228,551)<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td>unfavorable<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n&nbsp;\r\n\r\n<\/div>\r\n<section class=\"textbox watchIt\" aria-label=\"Watch It\">Before finishing this section, let\u2019s take a look at one other example of a flexible budget report:\r\n\r\n<iframe src=\"\/\/plugin.3playmedia.com\/show?mf=6352588&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=0v-dtkbrPW4&amp;video_target=tpm-plugin-f187r284-0v-dtkbrPW4\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\" data-mce-fragment=\"1\"><\/iframe>\r\n\r\nYou can view the <a href=\"https:\/\/oerfiles.s3.us-west-2.amazonaws.com\/Managerial+Accounting\/Transcripts\/FlexibleBudgetVariance_transcript.txt\" target=\"_blank\" rel=\"noopener\">transcript for \"flexible budget variance\" here (opens in new window)<\/a>.\r\n\r\n<\/section>&nbsp;\r\n\r\n<span style=\"font-family: 'Public Sans', -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif;\">Now, check your understanding of the budget performance report.<\/span>\r\n\r\n<section class=\"textbox tryIt\" aria-label=\"Try It\">[ohm_question hide_question_numbers=1]220612[\/ohm_question]\r\n\r\n<\/section>","rendered":"<section class=\"textbox learningGoals\" aria-label=\"Learning Goals\">\n<ul>\n<li>Prepare a flexible budget performance report<\/li>\n<\/ul>\n<\/section>\n<p>&nbsp;<\/p>\n<p>For the flexible budget performance report, the flexible budget is prepared using the ACTUAL level of production instead of the budgeted activity. The difference between actual costs incurred and the flexible budget amount for that same level of operations is the budget variance. Budget variances can indicate a department\u2019s or company\u2019s degree of efficiency since they emerge from a comparison of what was with what should have been. The performance report shows the budget variance for each line item. We\u2019re preparing this performance report on a summary basis for an entire year, but a company might prepare this kind of report using more detail and presenting it on a monthly basis.<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table gridded\">\n<caption class=\"u-clearfix\">\n<\/caption>\n<\/table>\n<\/div>\n<div>Flexible Budget Performance Report<\/div>\n<div>Month Ended September 30, 2021<\/div>\n<p>Actual Results<br \/>\nFlexible Budget Variance<br \/>\nF or U<br \/>\nFlexible Budget<br \/>\nSales Volume Variance<br \/>\nF or U<br \/>\nStatic Budget<\/p>\n<p>Units<br \/>\n180,000<\/p>\n<p>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 180,000<\/p>\n<p>\u00a0 \u00a0 \u00a0 \u00a0 172,405<\/p>\n<p>Sales Revenue<br \/>\n$6,030,000<br \/>\n$\u00a0 \u00a0(90,000)<br \/>\nU<br \/>\n$6,120,000<br \/>\n$ \u00a0 258,230<br \/>\nF<br \/>\n$ 5,861,770<\/p>\n<p>Variable Costs<br \/>\n3,420,000<br \/>\n$ \u00a0 \u00a0 57,600<br \/>\nU<br \/>\n3,362,400<br \/>\n$ \u00a0 141,875<br \/>\nU<br \/>\n3,220,525<\/p>\n<p>Contribution Margin<br \/>\n2,610,000<br \/>\n$\u00a0 (147,600)<br \/>\nU<br \/>\n2,757,600<br \/>\n$ \u00a0 116,355<br \/>\nF<br \/>\n2,641,245<\/p>\n<p>Fixed Costs<br \/>\n2,650,000<br \/>\n$ \u00a0 \u00a0197,306<br \/>\nU<br \/>\n2,452,694<br \/>\n$\u00a0 \u00a0 \u00a0 \u00a0 \u00a0&#8211;<br \/>\nN\/A<br \/>\n2,452,694<\/p>\n<p>Operating Income<br \/>\n$ (40,000)<span class=\"u-sr-only\">Double line<\/span><br \/>\n$\u00a0 (344,906)<br \/>\nU<span class=\"u-sr-only\">Double line<\/span><br \/>\n$\u00a0 304,906<span class=\"u-sr-only\">Double line<\/span><br \/>\n$ \u00a0 116,355<br \/>\nF<span class=\"u-sr-only\">Double line<\/span><br \/>\n$\u00a0 \u00a0188,551<span class=\"u-sr-only\">Double line<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>The overall budget was unfavorable:<\/p>\n<div style=\"text-align: left;\">\n<table class=\"fin-table acctstatement fw\">\n<thead>\n<tr class=\"u-sr-only\">\n<th scope=\"col\">Description<\/th>\n<th scope=\"col\">Total<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Price\/Cost Variance<\/td>\n<td class=\"r\">$\u00a0 (344,906)<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Volume Variance<\/td>\n<td class=\"r\">116,355<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Overall budget variance<\/td>\n<td class=\"r line-double highlight\">$\u00a0 (228,551)<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td>unfavorable<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<\/div>\n<section class=\"textbox watchIt\" aria-label=\"Watch It\">Before finishing this section, let\u2019s take a look at one other example of a flexible budget report:<\/p>\n<p><iframe loading=\"lazy\" src=\"\/\/plugin.3playmedia.com\/show?mf=6352588&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=0v-dtkbrPW4&amp;video_target=tpm-plugin-f187r284-0v-dtkbrPW4\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>You can view the <a href=\"https:\/\/oerfiles.s3.us-west-2.amazonaws.com\/Managerial+Accounting\/Transcripts\/FlexibleBudgetVariance_transcript.txt\" target=\"_blank\" rel=\"noopener\">transcript for &#8220;flexible budget variance&#8221; here (opens in new window)<\/a>.<\/p>\n<\/section>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: 'Public Sans', -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif;\">Now, check your understanding of the budget performance report.<\/span><\/p>\n<section class=\"textbox tryIt\" aria-label=\"Try It\"><iframe loading=\"lazy\" id=\"ohm220612\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=220612&theme=lumen&iframe_resize_id=ohm220612&source=tnh\" width=\"100%\" height=\"150\"><\/iframe><\/p>\n<\/section>\n","protected":false},"author":6,"menu_order":25,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Flexible Budget Performance Report\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"flexible budget variance\",\"author\":\"Carol Sargent\",\"organization\":\"\",\"url\":\"https:\/\/youtu.be\/0v-dtkbrPW4\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":142,"module-header":"- Select Header -","content_attributions":[{"type":"original","description":"Flexible Budget Performance Report","author":"Joseph Cooke","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"copyrighted_video","description":"flexible budget variance","author":"Carol Sargent","organization":"","url":"https:\/\/youtu.be\/0v-dtkbrPW4","project":"","license":"arr","license_terms":"Standard YouTube License"}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/pressbooks\/v2\/chapters\/167"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/wp\/v2\/users\/6"}],"version-history":[{"count":1,"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/pressbooks\/v2\/chapters\/167\/revisions"}],"predecessor-version":[{"id":342,"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/pressbooks\/v2\/chapters\/167\/revisions\/342"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/pressbooks\/v2\/parts\/142"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/pressbooks\/v2\/chapters\/167\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/wp\/v2\/media?parent=167"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=167"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/wp\/v2\/contributor?post=167"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/managerialaccounting\/wp-json\/wp\/v2\/license?post=167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}