Question

Business Solutions's second-quarter 2018 fixed budget performance report for its computer furniture operations follows. The $156,000 budgeted expenses include $108,000 in variable expenses for desks and $18,000 in variable expenses for chairs, as well as $30,000 fixed expenses. The actual expenses include $31,000 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 144 150 72 80 $180,000 $186,000 $6,000 F 36,000 41,200 5,200 F 156,000 163,880 7,880 U $ 60,000 $ 63,320 $3,320 F
Prepare a flexible budget performance report that shows any variances between budgeted results and actual results.

Answer 1

Step-by-step explanation:

Desk Chairs Total

Sales 187,500 40,000 227,500

Fixed sales /fixed sales unit

Desk

180000/144 = 1250

150 units = 1250*150

Chair

36,000/72= 500

80 units 500*80 =40,000

Variable expenses 112,500

Desk

Budgeted variable expenses /Budgeted units

108,000/144 = 750

150 units = 750*150= 112,500 20,000 132,500

Chairs

18000/72 =250

250*80=20,000

Flexible performance report

Flexible budget Actual result variance

Desk Sales 187,500 186,000 1,500 U

Chairs 40,000 41,200 1,200 F

Variable Exp ( 132,500 ) ( 132,880 ) 380 U

Contribution 95,000 94,320 680 U

Fixed Exp. (30,000) ( 31,000 ) 1,000 U

Income 65,000 63,320 1,680 U