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The actual information pertains to the third quarter. As part of its budgeting ...
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The actual information pertains to the third quarter. As part of its budgeting process, Bishan Indian Restaurant (BIR) had developed the following static budget for the third quarter on the expectation that it would serve 10,000 meals. BIR is in the process of preparing the flexible budget and understanding the results.
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Actual Results
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Flexible Budget
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Static Budget
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Sales volume (in
units)
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11,000
|
|
|
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10,000
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Sales revenues
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$238,000
|
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$
|
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$230,000
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Variable costs
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$150,000
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$
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$180,000
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Contribution margin
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$88,000
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$
|
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$50,000
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Fixed costs
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$36,000
|
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$
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$35,000
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Operating profit
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$ 52,000
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$
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$ 15,000
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QUESTION1. The amount for variable costs in the flexible budget will be: