Comprehensive Operating Expense Variance Analysis. Miko Computer Programmers provides contract programming services to major corporations. It budgets around programming hours sold (worked). For the third quarter, Miko budgeted 180,000 hours of sales. An hour is billed at \(\$ 45\) and has a "loaded" cost of \(\$ 35.50\). Miko's flexible operating expense budget formulas are:

\section*{Required:}
1. Prepare income statements that show the original budget, a flexible budget based on actual hours sold, and actual results.
2. Prepare an analysis of gross margin differences.
3. What type of cost behavior appears in the operating expense spending variances?

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Administrative salaries. Sales salaries..... Utilities and supplies Training costs.... Depreciation expense Property taxes. $90,000+ $0.04 per hour sold 60,000 + 0.06 per hour sold 11,500 + 0.25 per hour sold 2.05 per hour sold 61,000 2,000 Actual results for the third quarter showed that 195,000 hours generated rev- enue of $8,190,000 and programmer costs of $6,630,000. Actual operating costs were: Administrative salaries.. Sales salaries..... Utilities and supplies Training costs Depreciation expense Property taxes $ 96,800 73,600 58,060 415,250 61,000 1,850