Success Systems’ second quarter 2014 fixed budget performance report for its com
ID: 340706 • Letter: S
Question
Success Systems’ second quarter 2014 fixed budget performance report for its computer furniture operations follows. The $159,690 budgeted expenses include $106,400 in variable expenses for desks and $18,290 in variable expenses for chairs, as well as $35,000 fixed expenses. The actual expenses include $36,500 fixed expenses. List fixed and variable expenses separately.
Success Systems’ second quarter 2014 fixed budget performance report for its computer furniture operations follows. The $159,690 budgeted expenses include $106,400 in variable expenses for desks and $18,290 in variable expenses for chairs, as well as $35,000 fixed expenses. The actual expenses include $36,500 fixed expenses. List fixed and variable expenses separately.
Explanation / Answer
Actual Flexible budget variance Flexible budget Sales volume variance Static budget Desk sales 146 146 140 Chair sales 67 67 59 Sales revenue Desk 195640 1460 U 197100 8100 F 189000 Sales revenue chair 35175 1005 F 34170 4080 F 30090 Total sales revenue 230815 455 U 231270 12180 F 219090 Less Variable expense Desk 110960 4560 U 106400 Variable expense chair 20770 2480 U 18290 Total variable expense 132020 290 U 131730 7040 U 124690 Contribution margin 98795 745 U 99540 5140 F 94400 Less Fixed cost 36500 1500 U 35000 0 35000 Net operating income 62295 2245 U 64540 5140 F 59400
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