Flexible Budget Variance (U or F) Percentage Variance* Extreme SportsSubunit X Actual (U or F) Flexible Budget $ 500,000 375,000 $ 545,500 387,000 $ $ Sales Cost of goods sold......... Gross margin Operating expenses Operating income before service department charges Service department charges 158,500 10,300 10,380 125,000 10,000 ....... $ 148,120 $ 115,000 40,000 (allocated) ........... $ Operating income........ *Flexible budget variance/Flexible budget 52,000 96,120 $ 75,000