Accounting Problem - Variance Analysis
kingjen6
Question
Four Flags is a retail department store. On January 1, 2014, Four Flags' accountants used the following data to develop the master budget for Four Flags for 2014:
| Cost | ||
| Cost of Goods Sold | ||
| Selling and Promotion Expense | ||
| Building Occupancy Expense | ||
| Buying Expense | ||
| Delivery Expense | ||
| Credit and Collection Expense |
Expected unit sales in 2014 were 1,300,000, and 2014 total revenue was expected to be $13,000,000. Actual 2014 unit sales turned out to be 1,000,000, and total revenue was $10,000,000. Actual total costs in 2014 were:
| Cost of Goods Sold | $6,000,000 |
| Selling and Promotion Expense | $900,000 |
| Building Occupancy Expense | $390,000 |
| Buying Expense | $640,000 |
| Delivery Expense | $190,000 |
| Credit and Collection Expense | $25,000 |
Required
Compute the flexible-budget variances for the following two cost items (NOTE: enter favorable variances as positive numbers and unfavorable variances as negative numbers):
Credit and Collection Expense =
Selling and Promotion Expense =
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