T&P Fashion Shops
T&P Fashion Shops is a new chain that operates 10 stores inmajor malls throughout the United States. Each store manager isresponsible for preparing a flexible budget for the store. T&Pheadquarters accumulates and analyzes the information for eachstore and in the aggregate.
Below follows some cost estimates for the Houston store.
T&P Fashions
Flexible Budget Information
Expense
Fixed
Variable
Cost of sales
$210,000
40%
$740,000
Management
27,000
12%
186,000
Shop assistants
162,000
8%
268,000
Rent
13,200
5%
54,450
Utilities
34,800
34,800
Total Cost $447,000
$1,283,250
Additional information
The sales forecast for the year is $1,400,000.
Variable expenses are based on revenues. Do note that percentageclause for rent only kicks in above $500,000 in sales.
Other expenses are all specific to this store. Headquarters payfor marketing and corporate overhead expenses.
T&P wants to see a flexible budget based on the salesforecast, including estimates for sales being 10% below budget and10% above budget.
Actual results
T&P Fashions
Actual Results from Operations
Revenues
$1,325,000
Cost of sales
790,000
Management
208,000
Shop assistants
230,000
Rent
58,200
Utilities
31,000
Operating profit
$7,800
Required:
Computations (use Excel)
Prepare a flexible budget in good format.
Compute the flexible variances and indicate whether favorable orunfavorable.
Headquarters are contemplating charging each store a 5%marketing expense based on sales. How will that affect theoperating profit of the store and the money available formanagerial bonuses based on actual results for the past year?Summarize the information in the table.
I am reposting this question becuase the aid that I receivedbefore has left me a but confused as to how the person whomprovided an anwer, actually obtained the answer.
If I cannot understand how the answer was obtained then theanswer alone does not help me. If someone would not mindprovideding the answer and assistance as to how they met theirresults it would be greatlly appreciated.
T&P Fashion Shops
T&P Fashion Shops is a new chain that operates 10 stores inmajor malls throughout the United States. Each store manager isresponsible for preparing a flexible budget for the store. T&Pheadquarters accumulates and analyzes the information for eachstore and in the aggregate.
Below follows some cost estimates for the Houston store.
T&P Fashions | |||
Flexible Budget Information | |||
Expense | Fixed | Variable | |
Cost of sales | $210,000 | 40% | $740,000 |
Management | 27,000 | 12% | 186,000 |
Shop assistants | 162,000 | 8% | 268,000 |
Rent | 13,200 | 5% | 54,450 |
Utilities | 34,800 | 34,800 | |
| Total Cost | $447,000 | $1,283,250 | |
Additional information
The sales forecast for the year is $1,400,000.
Variable expenses are based on revenues. Do note that percentageclause for rent only kicks in above $500,000 in sales.
Other expenses are all specific to this store. Headquarters payfor marketing and corporate overhead expenses.
T&P wants to see a flexible budget based on the salesforecast, including estimates for sales being 10% below budget and10% above budget.
Actual results
T&P Fashions | |
Actual Results from Operations | |
Revenues | $1,325,000 |
Cost of sales | 790,000 |
Management | 208,000 |
Shop assistants | 230,000 |
Rent | 58,200 |
Utilities | 31,000 |
Operating profit | $7,800 |
Required:
Computations (use Excel)
Prepare a flexible budget in good format.
Compute the flexible variances and indicate whether favorable orunfavorable.
Headquarters are contemplating charging each store a 5%marketing expense based on sales. How will that affect theoperating profit of the store and the money available formanagerial bonuses based on actual results for the past year?Summarize the information in the table.
I am reposting this question becuase the aid that I receivedbefore has left me a but confused as to how the person whomprovided an anwer, actually obtained the answer.
If I cannot understand how the answer was obtained then theanswer alone does not help me. If someone would not mindprovideding the answer and assistance as to how they met theirresults it would be greatlly appreciated.
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Related questions
T&P Fashion Shops
T&P Fashion Shops is a new chain that operates 10 stores inmajor malls throughout the United States. Each store manager isresponsible for preparing a flexible budget for the store. T&Pheadquarters accumulates and analyzes the information for eachstore and in the aggregate.
Below follows some cost estimates for the Houston store.
T&P Fashions | |||
Flexible Budget Information | |||
Expense | Fixed | Variable | |
Cost of sales | $210,000 | 40% | $740,000 |
Management | 27,000 | 12% | 186,000 |
Shop assistants | 162,000 | 8% | 268,000 |
Rent | 13,200 | 5% | 54,450 |
Utilities | 34,800 | 34,800 | |
| Total Cost | $447,000 | $1,283,250 | |
Additional information
The sales forecast for the year is $1,400,000.
Variable expenses are based on revenues. Do note that percentageclause for rent only kicks in above $500,000 in sales.
Other expenses are all specific to this store. Headquarters payfor marketing and corporate overhead expenses.
T&P wants to see a flexible budget based on the salesforecast, including estimates for sales being 10% below budget and10% above budget.
Actual results
T&P Fashions | |
Actual Results from Operations | |
Revenues | $1,325,000 |
Cost of sales | 790,000 |
Management | 208,000 |
Shop assistants | 230,000 |
Rent | 58,200 |
Utilities | 31,000 |
Operating profit | $7,800 |
Required:
Computations (use Excel)
Prepare a flexible budget in good format.
Compute the flexible variances and indicate whether favorable orunfavorable.
Headquarters are contemplating charging each store a 5%marketing expense based on sales. How will that affect theoperating profit of the store and the money available formanagerial bonuses based on actual results for the past year?Summarize the information in the table.
I am reposting this question becuase the aid that I receivedbefore has left me a but confused as to how the person whomprovided an anwer, actually obtained the answer.
If I cannot understand how the answer was obtained then theanswer alone does not help me. If someone would not mindprovideding the answer and assistance as to how they met theirresults it would be greatlly appreciated.
