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

1. 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).
2. Be careful to use the correct activity measure.
3. Read the directions about the sign that you should enter.
4. No partial credit

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Four Flags is a retail department store. On January 1, 2021, Four Flags' accountants used the following data to develop the master budget for Four Flags for 2021:

Cost	Fixed	Variable (per unit sold)
Cost of Goods Sold	$0	$5.60
Selling and Promotion Expense	$220,000	$0.80
Building Occupancy Expense	$190,000	$0.20
Buying Expense	$150,000	$0.40
Delivery Expense	$120,000	$0.10
Credit and Collection Expense	$74,000	$0.01

Expected unit sales in 2021 were 1,200,000, and 2021 total revenue was expected to be $12,000,000. Actual 2021 unit sales turned out to be 1,100,000, and total revenue was $11,000,000. Actual total costs in 2021 were:

Cost of Goods Sold	$6,000,000
Selling and Promotion Expense	$900,000
Building Occupancy Expense	$480,000
Buying Expense	$640,000
Delivery Expense	$200,000
Credit and Collection Expense	$40,000

Required Compute the flexible budget variances in 2021 for the following two cost items (NOTE: enter favorable variances as positive numbers and unfavorable variances as negative numbers):

In this problem, you must create the flexible budget and flexible budget variances for two cost items. 1. 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). 2. Be careful to use the correct activity measure. 3. Read the directions about the sign that you should enter. 4. No partial credit Four Flags is a retail department store. On January 1, 2021, Four Flags' accountants used the following data to develop the master budget for Four Flags for 2021: Cost Variable (per unit sold) Cost of Goods Sold Fixed $0 $220,000 $5.60 Selling and Promotion Expense $0.80 Building Occupancy Expense $190,000 $150,000 Buying Expense $0.20 $0.40 $0.10 Delivery Expense $120,000 Credit and Collection Expense $74,000 $0.01 Expected unit sales in 2021 were 1,200,000, and 2021 total revenue was expected to be $12,000,000. Actual 2021 unit sales turned out to be 1,100,000, and total revenue was $11,000,000. Actual total costs in 2021 were: Cost of Goods Sold $6,000,000 Selling and Promotion Expense Building Occupancy Expense $900,000 $480,000 $640,000 Buying Expense Delivery Expense $200,000 Credit and Collection Expense $40,000 Required Compute the flexible budget variances in 2021 for the following two cost items (NOTE: enter favorable variances as positive numbers and unfavorable variances as negative numbers): Delivery Expense Cost of Goods Sold Submit Answer Tries 0/6