Problem 1:

La-yas Travels
Flexible Budget
For the Month Ended July 31
Actual passengers (q1) 1,400
Actual cruises (q2) 24
Sales (P1,000q1) P1,400,000
Expenses:
Vessel operating costs (P208,000 + 19,200q2 + P80q1) 780,800
Administrative costs (P172,000 + 960q2 + 40q1) 251,040
Advertising 68,000
Insurance 116,000
Total expense 1,215,840
Net operating income P184,160

Problem 2

Required 1:
Laba Linis
Planning Budget
For the Month Ended August 31
Budgeted cars washed (q) 9,000
Revenue (P245q) P2,205,000
Expenses:
Cleaning Supplies (P40q) 360,000
Electricity (P60,000 + P7.50q) 127,500
Maintenance (P10q) 90,000
Wages and salaries (P250,000 + P15q) 385,000
Depreciation 300,000
Rent 400,000
Administrative expenses (P200,000 + P5q) 245,000
Total expense 1,907,500
Net operating income P297,500

Required 2:
Laba Linis
Flexible Budget
For the Month Ended August 31
Actual cars washed (q) 8,800
Revenue (P245q) P2,156,000
Expenses:
Cleaning Supplies (P40q) 352,000
Electricity (P60,000 + P7.50q) 126,000
Maintenance (P10q) 88,000
Wages and salaries (P250,000 + P15q) 382,000
Depreciation 300,000
Rent 400,000
Administrative expenses (P200,000 + P5q) 244,000
Total expense 1,892,000
Net operating income P264,000

Problem 3
 Laba Linis
Revenue and Spending Variances
For the Month Ended August 31

Actual Results Flexible Budget Revenue and

Spending
Variances
Cars washed 8,800 8,800
Revenue (P245q) P2,154,000 P2,156,000 P2,000 U
Expenses:
Cleaning Supplies (P40q) 378,000 352,000 26,000 U
Electricity (P60,000 + P7.50q) 135,500 126,000 9,500 U
Maintenance (P10q) 113,000 88,000 25,000 U
Wages and salaries (P250,000 + P15q) 425,000 382,000 43,000 U
Depreciation 300,000 300,000 0
Rent 400,000 400,000 0
Administrative expenses (P200,000 + P5q) 247,500 244,000 3,500 U
Total expense 1,997,000 1,892,000 105,000 U
Net operating income P157,000 P264,000 P107,000 U