Four Flags is a retail department store. On January 1, 2014, Four Flags\' accoun
ID: 2475004 • Letter: F
Question
Four Flags is a retail department store. On January 1, 2014, Four Flags' accountants used the following data to develop the master budget for Four Flags for 2014:
Fixed
Variable (per unit sold)
$0
$5.80
$215,000
$0.80
$185,000
$0.10
$140,000
$0.40
$110,000
$0.05
$74,000
$0.01
Expected unit sales in 2014 were 1,200,000, and 2014 total revenue was expected to be $12,000,000. Actual 2014 unit sales turned out to be 1,100,000, and total revenue was $11,000,000. Actual total costs in 2014 were:
Required
Compute the flexible-budget variances for the following two cost items (NOTE: enter favorable variances as positive numbers and unfavorable variances as negative numbers):
Delivery Expense?
Cost of Goods Sold ?
Fixed
Variable (per unit sold)
Cost of Goods Sold$0
$5.80
Selling and Promotion Expense$215,000
$0.80
Building Occupancy Expense$185,000
$0.10
Buying Expense$140,000
$0.40
Delivery Expense$110,000
$0.05
Credit and Collection Expense$74,000
$0.01
Explanation / Answer
(110,000+ 1,100,000*.05)
=165,000
(1,100,000* $5.80)
$6,380,000
Fexible Budget Actual Variance Delivery expense(110,000+ 1,100,000*.05)
=165,000
170,000 5000(U) Cost of goods sold(1,100,000* $5.80)
$6,380,000
$6,000,000 380,000(F)Related Questions
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