Business Solutions’ second quarter 2012 fixed budget performance report for its computer furniture operations follows. The $156,000 budgeted expenses include $108,000 in variable expenses for desks and $18,000 in variable expenses for chairs, as well as $30,000 fixed expenses. The actual expenses include $31,000 fixed expenses.

Business Solutions’ second quarter 2012 fixed budget performance report for its computer furniture operations follows. The $156,000 budgeted expenses include $108,000 in variable expenses for desks and $18,000 in variable expenses for chairs, as well as $30,000 fixed expenses. The actual expenses include $31,000 fixed expenses.

	Fixed Budget		Actual Results		Variances
Desk sales (in units)		144		150
Chair sales (in units)		72		80
Desk sales (in dollars)	$	180,000	$	186,000	$	6,000 F
Chair sales (in dollars)	$	36,000	$	41,200	$	5,200 F
Total expenses	$	156,000	$	163,880	$	7,880 U
Income from operations	$	60,000	$	63,320	$	3,320 F

Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately.
 
Explanation:

Supporting computations
Total budgeted desk sales	$	180,000
Total units budgeted		144
Budgeted selling price	$	1,250	per unit
Flexible budget units		150
Flexible budget sales	$	187,500
Total budgeted chair sales	$	36,000
Total units budgeted		72
Budgeted selling price	$	500	per unit
Flexible budget units		80
Flexible budget sales	$	40,000
Total budgeted variable costs for desks	$	108,000
Total units budgeted		144
Budgeted variable expenses per desk	$	750
Flexible budget units		150
Flexible budget variable expenses for desks	$	112,500
Total budgeted variable costs for chairs	$	18,000
Total units budgeted		72
Budgeted variable expenses per chair	$	250
Flexible budget units		80
Flexible budget variable expenses for chairs	$	20,000
Total budgeted variable expenses*	$	132,500
Total actual expenses	$	163,880
Actual fixed expenses		31,000
Actual variable expenses	$	132,880

*($112,500 + $20,000), from calculation above