This analysis of flexible and static budget variance follows Exhibit 8-6 on page 316. You have to calculate the total variable and fixed flexible budget variances and sales activity variances. All of the green shaded boxes (11 of them) are to contain answers. All of the variances must be designated as favorable or unfavorable.

Only the ? marks and F or U will need answers. Use the chart on pg 316 that is added as a reference to get the numbers

A	B	C	D	E	F	G	H	I	J	K
5		Actual results at			Flexible Budget for
6		Actual Activity Level			Actual Sales Activity				Static Budget
7					2				3
8					90	(# requests)			75	(the static budget # of requests) TIMES the
9						TIMES
10	Systems Consulting,				$500	Variable cost per request =			?	Variable cost per request
11	VARIABLE COST	? (fill in actual variable costs)			$45,000	BUDGETED VARIABLE			?	EQUALS the static budget expected
12										variable cost
13
14	PLUS		?	"F" or "U"?	cell B14 - cell D14)

?

"F" or "U"?

cell D14 - cell G14)

15 16 17 18

Systems Consulting,

$78,000

given

$65,000

given

$65,000

given

19

FIXED COST

20 21 22 23

EQUALS

?

"F" or "U"?

cell B18 - cell D18)

"F" or "U"?

?

cell D18 - cell G18)

24 25

Systems Consulting,

26

TOTAL COST

$124,000

given

$102,500

Systems Consulting,

27

Total

28

Note! All of the following boxes (BOLD >>>>>

have to be filled in, including the "F" or "U", meaning

favorable or unfavorable variance: 11B,

14C, 14D, 23C, 23D, 14G, 14H, 10I, 11I, 23H, 23I.