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Overhead Cost Budget at Jim's Landscaping

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.


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.