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ID: 2372021 • Letter: #

Question

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Success Systems’ second quarter 2010 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. Prepare a flexible budget

performance report that shows any variances between budgeted

results and actual results. List fixed and variable expenses

separately.

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Explanation in excel would be greatly appreciated.

Explanation / Answer

Success Systems’

Flexible budget

Difference

Budget at

Actual cost at

favorable-F

Variable cost

Variable cost

unfavorable-U

desks

$108,000

0

favorable-F

chairs

$18,000

0

favorable-F

Fixed costs

Fixed costs

$30,000

$31,000

unfavorable-U



Success Systems’





Flexible budget


Difference


Budget at

Actual cost at


favorable-F

Variable cost


Variable cost


unfavorable-U

desks

$108,000

0


favorable-F

chairs

$18,000

0


favorable-F






Fixed costs


Fixed costs




$30,000


$31,000

unfavorable-U