Business Solutions\' second quarter 2012 fixed budget performance report for its

Question

Business Solutions' second quarter 2012 fixed budget performance report for its computer furniture operations follows. The $173,500 budgeted expenses include $115,600 in variable expenses for desks and $18,900 in variable expenses for chairs, as well as $39,000 fixed expenses. The actual expenses include $40,200 fixed expenses Actual Variances Fixed Budget Results 142 78 136 70 Desk sales (in units) Chair sales (in units) Desk sales (in dollars) Chair sales (in dollars) Total expenses Income from operations 179.520 s 186.020 s 6.500 F 36.400 $41,730 $ 5,330 F 173,500 182,370 42,420 $8,870 U $ 45,380 $ 2,960 F Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Explanation / Answer

Flexible Budget performance report is as prepared below:

Working:

Business Solutions Flexible Budget Performance Report For Quarter Ended June Difference Favorable (F) Flexible Actual Unfavorable (U) Neither Favorable nor Unfavorable (N) Sales in units (desks) 142 142 0 N Sales in units (chairs) 78 78 0 N Sales in dollars (desks) 187,440 186,020 1,420 U Sales in dollars (chairs) 40,040 41,730 -1,690 F Total Expenses Variable expenses (desk) 120,700 Variable expenses (chairs) 20,790        Total variable 141,490 142,170 -680 U Fixed expenses 39,000 40,200 -1,200 U Net income 46,990 45,380 1,610 U

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