The systems consulting department of Gullickson Golf Products designs systems for data collection, encoding, and reporting to fit the needs of other departments within the company. The cost driver for costs in the systems consulting department is the number of requests made to the department. The expected variable cost of handling a request was $500, and the number of requests expected for June 20X1 was 75. Gullickson budgeted its monthly fixed costs for the department (salaries, equipment depreciation, space costs) at $65,000.

The actual number of requests serviced by systems consulting in June 20X1 was 90, and the total costs incurred by the department was $124,000. Of that amount, $78,000 was for fixed costs. Compute the static budget variances and the flexible-budget variances for variable and fixed costs for the systems consulting department for June 20X1.

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Exhibit 8-12 Net revenue Variable Costs Budget $13,000,000 Actual Variance $12,700,000 300,000 U Fuel Repairs and maintenance Supplies and miscellaneous Variable payroll S 520,000 390,000 2,080,000 8,060,000 $11,050,000 S516,000 398,000 2,070,000 7,940,000 $10,924,000 S 4,000 F 8,000 U 10,000 F 120,000 F $126000 F Total variable costs Fixed Costs S 160,000 200,000 460,000 170,000 990,000 $177,000 200,000 460,000 163,000 1,000,000 S17,000 U Rent Depreciation Other fixed costs Total fixed costs Total fixed and variable costs Operating income 7,000 F 5 10,000 U S116,000F $184,000 U 12,040,000 000 116 $960,000 S776,000 U Unfaworable. F Favorable. For purposes of this anaysis, assume that all of these costs are totally variable with respect to sales revenue. In practice, many are mixed and would have to be subdivided into variable and fixed components before a meaningful analysis could be made. Aso, assume that the prices and mix of services sold remain unchanged.