Question

Business Solutions's second-quarter 2020 fixed budget performance report for its computer furniture operations follows. The $163,260 budgeted expenses include $112,180 in variable expenses for desks and $15,080 in variable expenses for chairs, as well as $36,000 fixed expenses. The actual expenses include $37,500 fixed expenses. List fixed and variable expenses separately. Desk sales (in units) Chair sales (in units) Desk sales Chair sales Total expenses Income from operations Fixed Budget Actual Results Variances 142 148 58 66 $184,600 $190,920 $6,320 F 31,900 37,290 5,390 F 163,260 171,900 8,640 U $ 53,240 $ 56,310 $3,070 F Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. BUSINESS SOLUTIONS Flexible Budget Performance Report For Quarter Ended June 30 Flexible Budget Actual Results Variance Fav./Unf.

Answer 1

BUSINESS SOLUTIONS
Flexible Budget Performance Report
For Quarter Ended June 30
	Flexible Budget	Actual Results	Variance	Fav./Unf.
Desk sales	192,400.00	190,920.00	1,480.00	Unfavorable
Chair sales	36,300.00	37,290.00	990.00	Favorable
Variable expenses	134,080.00	134,400.00	320.00	Unfavorable
Contribution margin	94,620.00	93,810.00	810.00	Unfavorable
Fixed expenses	36,000.00	37,500.00	1,500.00	Unfavorable
Income from operation	58,620.00	56,310.00	2,310.00	Unfavorable
Explanation
Total budgeted desk sales	$       184,600.00
Total units budgeted	142.00
Budgeted selling price	$          1,300.00	per unit
Flexible budget units	148.00
Flexible budget sales	$       192,400.00
Total budgeted chair sales	$        31,900.00
Total units budgeted	58.00
Budgeted selling price	$             550.00	per unit
Flexible budget units	66.00
Flexible budget sales	$        36,300.00
Total budgeted variable costs for desks	$       112,180.00
Total units budgeted	142.00
Budgeted variable expenses per desk	$             790.00	per unit
Flexible budget units	148.00
Flexible budget variable expenses for desks	$       116,920.00
Total budgeted variable costs for chairs	$        15,080.00
Total units budgeted	58.00
Budgeted variable expenses per chair	$             260.00	per unit
Flexible budget units	66.00
Flexible budget variable expenses for chair	$        17,160.00
Variable expenses (Actual) = 171,900 - 37,500 = $134,400