Business Solutions's second-quarter 2018 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. List fixed and variable expenses separately. Desk sales (in units) Chair sales (in units) Desk sales Chair sales Total expenses Income from operations Fixed Budget Actual Results Variances 144 150 72 80 $180,000 $186,000 $6,000 F 36,000 41,200 5,200 F 156,000 163,880 7,880 U $ 60,000 $ 63,320 $3,320 F
Prepare a flexible budget performance report that shows any variances between budgeted results and actual results.

Explanation:

                                               Desk                      Chairs         Total

Sales                                       187,500                40,000       227,500

Fixed sales /fixed sales unit  

Desk    

180000/144  = 1250

150 units = 1250*150                  

Chair

36,000/72= 500

80 units 500*80 =40,000

Variable expenses            112,500

Desk

Budgeted variable expenses /Budgeted units

108,000/144 = 750

150 units = 750*150=          112,500                       20,000      132,500

Chairs

18000/72 =250

250*80=20,000

Flexible performance report

                            Flexible budget    Actual result    variance

Desk Sales               187,500               186,000         1,500 U

Chairs                        40,000                  41,200         1,200 F

Variable Exp            ( 132,500  )           (  132,880 )      380 U

Contribution              95,000                  94,320          680 U

Fixed Exp.                  (30,000)                (  31,000 )      1,000 U

Income                        65,000                  63,320         1,680 U

b

explanation:

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: