A.L.T. Furniture, Incorporated is a chair repair company. The company bases its budgets and performance reports on two measures of activity (i.e., cost drivers), chairs repaired and repair hours. Each chair is repaired for a flat fee regardless of the hours worked on the chair. The company uses the following data in its budgeting:
In January, the company budgeted for 183 chairs and 889 repair hours. The actual activity for the month was 190 chairs and 732 hours.
Required:Prepare a planning budget, a flexible budget, and a performance report showing the company's activity and revenue and spending variances for January. On the performance report indicate in each case whether the variance is favorable (F) or unfavorable (U).

Question

A.L.T. Furniture, Incorporated is a chair repair company. The company bases its budgets and performance reports on two measures of activity (i.e., cost drivers), chairs repaired and repair hours. Each chair is repaired for a flat fee regardless of the hours worked on the chair. The company uses the following data in its budgeting:

In January, the company budgeted for 183 chairs and 889 repair hours. The actual activity for the month was 190 chairs and 732 hours.
Required:Prepare a planning budget, a flexible budget, and a performance report showing the company's activity and revenue and spending variances for January. On the performance report indicate in each case whether the variance is favorable (F) or unfavorable (U).

Jevin Dobbins · Accepted Answer

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