In this problem, you must create the flexible budget and flexible budget variances for two cost items.

The examples that will help you are in the Master Budget lecture and Study Problem 8-27.

Before you compute the variance, you must identify the parameters of the cost functions (i.e., the fixed cost and the variable cost per unit).

Be careful to use the correct activity measure.

Read the directions about the sign that you should enter.

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Four Flags is a retail department store. On January 1, 2012, Four Flags' accountants used the following data to develop the master budget for Four Flags for 2012:

Cost	Fixed	Variable (per unit sold)
Cost of Goods Sold	$0	$5.40
Selling and Promotion Expense	$205,000	$0.80
Building Occupancy Expense	$180,000	$0.10
Buying Expense	$155,000	$0.40
Delivery Expense	$115,000	$0.10
Credit and Collection Expense	$78,000	$0.01

Expected unit sales in 2012 were 1,300,000, and 2012 total revenue was expected to be $13,000,000. Actual 2012 unit sales turned out to be 1,000,000, and total revenue was $10,000,000. Actual total costs in 2012 were:

Cost of Goods Sold	$6,000,000
Selling and Promotion Expense	$900,000
Building Occupancy Expense	$390,000
Buying Expense	$560,000
Delivery Expense	$200,000
Credit and Collection Expense	$70,000

Required Compute the flexible-budget variances for the following two cost items (enter favorable variances as positive numbers and unfavorable variances as negative numbers): Credit and Collection Expense Selling and Promotion Expense