Business Solutions's second-quarter 2020 fixed budget performance report for its computer furniture operations follows. The $162,290 budgeted expenses include $113,710 in variable expenses for desks and $14,580 in variable expenses for chairs, as well as $34,000 fixed expenses. The actual expenses include $35,500 fixed expenses. List fixed and variable expenses separately. Fixed Budget Actual Results Variances Desk sales (in units) 137 143 Chair sales (in units) 54 62 Desk sales $ 178,100 $ 184,470 $ 6,370 F Chair sales 27,000 31,930 4,930 F Total expenses 162,290 171,220 8,930 U Income from operations $ 42,810 $ 45,180 $ 2,370

Prepare a flexible budget performance report that shows any variances between budgeted results and actual results.

First we find thebudgeted unit sales values and then multiply with the actual units to get the flexible sales value. We do the similar operations for the expenses and then do the calculations. If the actual revenue is greater than flexible budget revenue then it is favorable but if actual expenses are more then they are unfavorable.

Explanation:

Business Solutions

Fixed Budget Actual Result Variance

Desks Units 137 143

Chair sales (in units) 54 62

Desk sales $ 178,100 $ 184,470 $ 6,370 F

Chair sales 27,000 31,930 4,930 F

Total expenses 162,290 171,220 8,930 U

Income from operations $ 42,810 $ 45,180 $ 2,370

Business Solutions

Flexible Budget Performance Report

Second-Quarter 2020

Flexible Budget Actual Results Variance (F / UNfav)

Desks ($ 178,100 / 137) 143

185900 $ 184,470 1430 Unfav

Chairs (27,000/54) 62

31000 31930 930 Fav

Variable Expenses 135430 135720 290 unfav

Desk Sales (113710/137) * 143

118690

Chair sales ($14,580 / 54) (62)

16740

Add Fixed $34,000 $35,500 1,500 (unfav)

Income from Operation 47470 45180 2290 unfav