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Problem - Tylon's Hardware uses a flexible budget to develop planning information for its warehouse operations. For 20X9, the company anticipated that it would have 96,000 sales units for 664 customer shipments. Average storage bin usage for various inventories was estimated to be 200 per day. The costs and cost drivers were determined to be as follows:
Item
Fixed
Variable
Cost driver
Product handling
$10,000
$1.25
per 100 units
Storage
-
3.00
per storage bin
Utilities
1,000
1.50
Shipping clerks
1.00
per shipment
Supplies
0.50
During the year, the warehouse processed 90,000 units for 600 customer shipments. The workers used 225 storage bins on average each day to sort, store, and process goods for shipment. The actual costs for 20X9 were:
Actual costs
$10,900
465
2,020
1,400
340
Question 1: Determine the 20X9 static budget variances.
Question 2: Determine the 20X9 flexible budget variances.
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