547

Variable Costs: Cell phone testing equipment $ 7,375 $ 9,430 $ (2,055) U Cell phone repair parts 18,220 16,500 1,720 U Direct labour for repair technicians 22,785 25,900 (3,115) U Shipment costs to return repairs to customers 4,790 5,650 (860) F Total variable costs 53,170 57,480 (4,310) U Fixed Costs: Store manager and supervisor salaries $ 25,000 $ 27,900 $ (2,900) F Depreciation expense on store fixtures 5,850 5,450 400 U Store lease and rental expense 28,490 26,000 2,490 U Utilities, telephone and internet expense 845 700 145 U Total fixed costs 60,185 60,050 135 U Total Expenses $ 113,355 $ 117,530 $ (4,175) U Required: a) Prepare an updated monthly report for May, showing the results with a flexible budget. Be sure to indicate whether your variances are Favourable or Unfavourable. You do not need revenues in order to complete this question. (30 Marks) b) Based on your flexible budget results, which five (5) variances should be investigated further. Why? Support your decision with an explanation