Question

Business Solutions's second-quarter 2018 fixed budget performance report for its computer furniture operations follows. The $168,990 budgeted expenses include $111,200 in variable expenses for desks and $20,790 in variable expenses for chairs, as well as $37,000 fixed expenses. The actual expenses include $38,000 fixed expenses. List fixed and variable expenses separately.

	Fixed Budget				Actual Results				Variances
Desk sales (in units)			139				145
Chair sales (in units)			63				71
Desk sales		$	179,310			$	185,600			$	6,290	F
Chair sales			34,020				39,405				5,385	F
Total expenses			168,990				177,810				8,820	U
Income from operations		$	44,340			$	47,195			$	2,855	F

Prepare a flexible budget performance report that shows any variances between budgeted results and actual results.

Answer 1

	Flexible Budget	Actual Results	Variance	Fav./Unf.
Desk sales	187050	185600	1450	Unfavorable
Chair sales	38340	39405	1065	Favorable
Variable expenses	139430	139810	380	Unfavorable
Contribution margin	85960	85195	765	Unfavorable
Fixed expenses	37000	38000	1000	Unfavorable
Income from operations	48960	47195	1765	Unfavorable
Workings:
	Flexible Budget
Desk sales	187050	=179310/139*145
Chair sales	38340	=34020/63*71
Variable expenses	139430	=(111200/139*145)+(20790/63*71)