you must create the flexible budget, and flexible budget variances for 2 cost items.

1. Before you compute the variances, you must identify the parameters of the cost functions (ie the fixed cost and variable cost per unit)
2. Be careful to use the correct activity measure
3. read the directions about the sign that you should enter

Four Flags is a retail department store, on jan 1 2019, Four Flags Accountants used the following data to develop a master budget:

Cost Fixed Variable (per sales dollar)

Selling & Prom. cost $200.000 $.080

Delivery expenses $115,000 $.010

Expected units sales 1,300,000, and dollars 13,000,000, and actual units 1,000,000 and actual sales $10,000,000

Actual cost

Selling & promotion $900,000

Delivery exp $ 170,000

Need to find the variances