Chillcott Manufacturing produces ceiling fans.A master budget was prepared by the controller based on sales of 19,500 fans for the month of May.The budgeted income statement for the period follows: During May, Chillcott produced and sold 23,400 fans and had the following actual results: Required:
a.Prepare a flexible budget for May.
b.Calculate Chillcott's static budget variance for May.
c.Will the static budget variance that you calculated in part (b) be useful to management? Why or why not?
d.Based on the available information, prepare a performance report for management.
e.Comment on the results of your report.

Question

Chillcott Manufacturing produces ceiling fans.A master budget was prepared by the controller based on sales of 19,500 fans for the month of May.The budgeted income statement for the period follows:  During May, Chillcott produced and sold 23,400 fans and had the following actual results:  Required: 
a.Prepare a flexible budget for May.
b.Calculate Chillcott's static budget variance for May.
c.Will the static budget variance that you calculated in part (b) be useful to management? Why or why not?
d.Based on the available information, prepare a performance report for management.
e.Comment on the results of your report.

Quizplus · Accepted Answer

The Answer of Chillcott Manufacturing produces ceiling fans.A master budget was prepared by the controller based on sales of 19,500 fans for the month of May.The budgeted income statement for the period follows:  During May, Chillcott produced and sold 23,400 fans and had the following actual results:  Required: 
a.Prepare a flexible budget for May.
b.Calculate Chillcott's static budget variance for May.
c.Will the static budget variance that you calculated in part (b) be useful to management? Why or why not?
d.Based on the available information, prepare a performance report for management.
e.Comment on the results of your report.

Chillcott Manufacturing Produces Ceiling Fans