Tugas Kelompok ke-3

(Minggu 8 / Sesi 12)

Theory

1. What is flexible budget?

2. How does flexible budget is differ from a static planning budget?
3. What is variance?
4. Mentioned all variances in flexible budget
5. Does Unfavorable Variance means bad variance?

CASES

1. Flexible Budget
So Yummy Restaurant sells fish barbeque. Here is information related to Revenue and
Costs/Expenses for June(q is the number of serving meals)

Formula
Revenue Rp33.000 q
Direct Material Cost Rp12.500 q
Direct Labor and salaries Rp20.800.000
Utility Expenses Rp1.600.000 + 0,4q
Rent Expense Rp4.400.000
Miscellenaous Expense Rp1.200.000 + $1.600q

So Yummy Restaurant makes planning budget for June with assumption there will be 1,800
meals. The actual serving meals is 1,700. The Actual Result for June is as follow:

ACCT6173 – Managerial Accounting

Revenue Rp55.840.000
Direct Material Cost Rp22.220.000
Direct Labor and salaries Rp20.260.000
Utility Expenses Rp2.160.000
Rent Expense Rp4.400.000
Miscellenaous Expense Rp4.480.000

Required:
Construct flexible budget performance

2. Nice Sleep is hotel chain and its house keeping budget contains the following items:

Variable Cost:

Direct Labor $36.000

Laundry Service $9.000
Supplies $5.000
Total variable $50.000
Fixed Cost:

Supervision $17.000
Inspection cost $1.000
Insurance expenses $2.000
Depreciation $15.000
Total fixed $35.000
The budget was estimated on 4.000-room rental for the month. During December, 3,000
rooms were actually rented, with the following costs incurred

ACCT6173 – Managerial Accounting

Variable Cost:

Direct Labor $38.000

Laundry Service $7.000
Supplies $5.200
Total variable $50.200
Fixed Cost:

Supervision $19.000
Inspection cost $1.500
Insurance expenses $2.500

Depreciation $14.500
Total fixed $37.500

Required:
a. Determined which item would be controllable by the house keeping manager
b. How much should have been spent during the month for providing of 3.000 rooms?
c. Prepare flexible budget and its variance

3. Critique Variance Report

Terminator Inc provides on-site residential pest extermination services.The company has
several mobile teams which are dispatched from a central location in company-owned
truck. The company uses the number of jobs to measure activity. At the beginning of
April, the company budgeted for 100 jobs, but the actual number of jobs turned out to be
105. A report comparing the budgeted revenues and costs to the actual revenues and costs
appears below:

ACCT6173 – Managerial Accounting

 Terminator Inc
Variance Report
For the month ended April 30
Planning Budget Actual Results Variances

100 105

Revenue $19.500 $20.520 $1.020F

Expenses:

Mobile team operating cost $10.0000 $10.320 $320U

Exterminating supplies $1.800 $960 840F
Advertising $800 $800 0
Dispatching cost $2.200 $2.340 140U
Office rent $1.800 $1.800 0
Insurance $2.100 $2.100 0\
Total Expense $18.700 $18.320 380F

Required:

Is the above variance report useful for evaluating how well revenues and costs were
controlled during April? Why, or why not?

ACCT6173 – Managerial Accounting