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Prepare a planning budget for August. In August, the company actually sold 11,200 servings of...

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Accounting

  1. Prepare a planning budget for August.
  2. In August, the company actually sold 11,200 servings of ice cream and staffed 780 employee labor-hours. Its budgeted revenue per serving is $5.00. Prepare a flexible budget for August using this new information.
  3. Calculate the activity variances in August.
  4. Provide a brief description of how the event's budget aligned to the planning budget.

Annies Homemade is preparing a planning budget for August. Its budgeted revenue per serving is $5.00. It has identified two cost driversnumber of servings and number of labor-hours. The company expects to sell 10,800 servings and to staff 700 employee labor-hours in August. Data concerning the companys cost formulas are shown below:

Fixed Cost Per Month Cost per Serving Cost per Labor-Hour
Ingredients expense $1.25
Salaries and wages expense $7,000 $8.00
Franchise fee $0.25
Credit card processing fees $0.09
Utilities expense $300 $0.02
Rent expense $3,000
Equipment depreciation expense $1,750
Other expenses $ 4,200

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