Question
Four Flags is a retail department store. On January 1, 2019, Four Flags' accountants used the following data to develop the master budget for Four
Four Flags is a retail department store. On January 1, 2019, Four Flags' accountants used the following data to develop the master budget for Four Flags for 2019:
Cost | Fixed | Variable (per unit sold) |
Cost of Goods Sold | $0 | $5.40 |
Selling and Promotion Expense | $205,000 | $0.80 |
Building Occupancy Expense | $180,000 | $0.10 |
Buying Expense | $155,000 | $0.30 |
Delivery Expense | $105,000 | $0.10 |
Credit and Collection Expense | $68,000 | $0.03 |
Expected unit sales in 2019 were 1,300,000, and 2019 total revenue was expected to be $13,000,000. Actual 2019 unit sales turned out to be 1,100,000, and total revenue was $11,000,000. Actual total costs in 2019 were:
Cost of Goods Sold | $6,000,000 |
Selling and Promotion Expense | $1,000,000 |
Building Occupancy Expense | $460,000 |
Buying Expense | $650,000 |
Delivery Expense | $200,000 |
Credit and Collection Expense | $25,000 |
Required Compute the flexible budget variances in 2019 for the following two cost items (NOTE: enter favorable variances as positive numbers and unfavorable variances as negative numbers): Delivery Expense ? Selling and Promotion Expense ?
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