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    Overhead Cost Budget at Jim's Landscaping

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    Jim's Landscaping is in the business of maintaining and improving yards in surrounding areas. The company bases its overhead cost budgets on the following data:

    Variable overhead costs:
    Supplies $4 per yard
    Machine maintenance $2 per yard
    Chemicals $6 per yard

    Fixed overhead costs
    Salaries and wages $2,300 per month
    Depreciation $800 per month
    Utilities $400 per month
    Rent $1,100 per month

    In June, the following actual costs were incurred for 83 yards:

    Supplies $320
    Machine maintenance $180
    Chemicals $500
    Salaries and wages $2,500
    Depreciation $800
    Utilities $450
    Rent $1,100

    Construct a flexible budget performance report using the data provided. Show computations.

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    Solution Preview

    Jim's Landscaping
    Flexible Budget Performance Report
    For June
    Budgeted Actual Favorable/(Unfavorable) Variance
    Number of yards 83 83 ...

    Solution Summary

    This solution illustrates how to prepare a flexible budget performance report.