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  • Actual Revenues - Flexible Budget Revenues Revenue Variances Actual Cost - Flexible Budget Costs Spending Variances

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    Larry's Lawn Service had higher than expected revenues and expenses for the month of June. Revenues were $1,750 higher than the flexible budget while expenses were $1,950 higher, mostly due to increases in wages, gasoline and supplies, and insurance costs. Despite the higher expenses, net operating income was $200 under budget.

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    Notes_Lecture 6.3.3

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    Larry's Lawn Service had higher than expected revenues and expenses for the month of June. Revenues were $1,750 higher than the flexible budget while expenses were $1,950 higher, mostly due to increases in wages, gasoline and supplies, and insurance costs. Despite the higher expenses, net operating income was $200 under budget.

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    13 views1 page

    Actual Revenues - Flexible Budget Revenues Revenue Variances Actual Cost - Flexible Budget Costs Spending Variances

    Uploaded by

    Consumer DigitalProduct
    Larry's Lawn Service had higher than expected revenues and expenses for the month of June. Revenues were $1,750 higher than the flexible budget while expenses were $1,950 higher, mostly due to increases in wages, gasoline and supplies, and insurance costs. Despite the higher expenses, net operating income was $200 under budget.

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    © All Rights Reserved
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    Revenue and Spending Variances

    Actual Revenues – Flexible Budget Revenues = Revenue Variances

    Actual Cost – Flexible Budget Costs = Spending Variances

    Larry's Lawn Service


    For the Month Ended June 30

    Revenue and
    Revenue/Cost Actual Flexible Spending
    Formulas Results Budget Variances
    Number of lawns (Q) 550 550
    Revenue ($75Q) $ 43,000 $ 41,250 $ 1,750 F
    Expenses:
    Wages and salaries ($5,000 + $30Q) $ 23,500 $ 21,500 $ 2,000 U
    Gasoline and supplies ($9Q) 5,100 4,950 150 U
    Equipment maintenance ($3Q) 1,300 1,650 350 F
    Office and shop utilities ($1,000) 950 1,000 50 F
    Office and shop rent ($2,000) 2,000 2,000 -
    Equipment Depreciation ($2,500) 2,500 2,500 -
    Insurance ($1,000) 1,200 1,000 200 U
    Total expenses 36,550 34,600 1,950 U
    Net operating income $ 6,450 $ 6,650 $ 200 U

    Practice Exercise: 9-19 (2), 9-17, 9-16, 9-15 (3), 9-13, 9-14, 9-3

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