Tajiri Corporation uses customers served as its measure of activity- T.docx

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Tajiri Corporation's flexible budget performance report for May compares the planned budget to actual results. The report shows that revenue was $700 higher than planned due to higher customer volume. Expenses for supplies and miscellaneous items were also lower than planned, resulting in an overall favorable variance of $5,150 for total expenses. Net operating income was $5,850 higher than the flexible budget due to the favorable revenue and expense variances.

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Tajiri Corporation uses customers served as its measure of activity. The following report
compares the planning budget to the actual operating results for the month of May:
Prepare the company's flexible budget performance report for May. Label each variance as
favorable (F) or unfavorable (U). (Input all amounts as positive values. Leave no cells blank -
be certain to enter "0" wherever required. Indicate the effect of each variance by
selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance). Omit the "$" sign in your response.)
Tajiri Corporation uses customers served as its measure of activity. The following report
compares the planning budget to the actual operating results for the month of May:
Solution
Tajiri Corporation Flexible Budget Performance Report For the Month Ended May 31 Actual
Result Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget
Customers served 34000 34000 Â Â Â Â Â Â Â Â 33,000 Revenue 116,300 700 F 115600
Â Â Â Â Â Â Â Â Â 3,400 F Â Â Â Â Â 112,200 Expenses: Wages and salaries 65,120 0 F
65120 Â Â Â Â Â Â Â Â Â 1,230 U Â Â Â Â Â Â Â Â 63,890 Supplies 18,690 2,730 F 21420
Â Â Â Â Â Â Â Â Â Â Â Â 630 U Â Â Â Â Â Â Â Â 20,790 Insurance 5,200 0 None 5200 0
None Â Â Â Â Â Â Â Â Â Â 5,200 Miscellaneous expense 12,660 2,420 F 15080
Â Â Â Â Â Â Â Â Â Â Â Â 320 U Â Â Â Â Â Â Â Â 14,760 Total expense 101,670 5,150 F
106820 Â Â Â Â Â Â Â Â Â 2,180 U 104,640 Net operating income 14,630 5,850 F 8780
Â Â Â Â Â Â Â Â Â 1,220 F 7,560

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Q1Flinders Company has two service departments, Factory Administration and Maintenance, and two operating departments. Selected information relating to these departments is given below:Service DepartmentsOperating DepartmentsFactoryMaintenanceXYAdministration Departmental costs$ 119,700 $ 63,940 $ 723,000 $ 623,000 Number of employees6 4 40 70 Total labor hours3,200 5,200 70,000 70,000 The company allocates service department costs by the step-down method. Factory Administration costs are allocated first on the basis of number of employees, and then Maintenance costs are allocated on the basis of total labor hours.Service DepartmentsOperating DepartmentsFactory AdministrationMaintenanceXY Departmental costs$ $ $ $ Allocations: Factory Administration Maintenance Total costs after allocations$ $ $ $ Q2Tajiri Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of May:Tajiri CorporationComparison of Planning Budget to Actual ResultsFor the Month Ended May 31PlanningActualVariancesBudgetResults Customers served39,000 40,000 Revenue (3.40q)$132,600 $136,500 $3,900 F Expenses: Wages and salaries ($23,900 + $1.29q)74,210 75,500 1,290 U Supplies ($0.69q)26,910 24,210 2,700 F Insurance ($5,800)5,800 5,800 0 Miscellaneous ($4,800 + $.38q)19,620 16,920 2,700 F Total expense126,540 122,430 4,110 F Net operating income$6,060 $14,070 $8,010 FRequired:1Complete the company's flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U). (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)Tajiri CorporationFlexible Budget Performance Report Part 1 & 2For the Month Ended May 31Planning BudgetActivity VariancesU/F/NoneFlexible BudgetRevenue and Spending VariancesU/F/NoneActual Results Customers served39,000 40,000 Revenue$132,600 $$ $$136,500 Expenses: Wages and salaries74,210 75,500 Supplies26,910 24,210 Insurance5,800 5,800 Miscellaneous19,620 16,920 Total expense126,540 122,430 Net operating income$6,060 $$ $$14,070 Q3“I can’t understand what’s happening here,” said Mike Holt, president of Severson Products, Inc. “We always seem to bid too high on jobs that require a lot of labor time in the Finishing Department, and we always seem to get every job we bid on that requires a lot of machine time in the Milling Department.Yet we don’t seem to be making much money on those Milling Department jobs. I wonder if the problem is in our overhead rates.” Severson Products manufactures high-quality wood products to customers’ specifications. Some jobs take a large amount of machine work in t ...

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