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Tylon's Hardware uses a flexible budget to develop planning information for its warehouse operations. For 20X2, 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 storages bin
Utilities
1,000
1.50 per 100 units
Shipping clerks
1.00 per shipment
Supplies
0.50 per shipment
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 20X2 were:
Actual costs
Product handing
10,900
465
2,020
Shipping Clerks
1,400
340
Question 1: Determine the 20X2 static budget variances
Question 2: Determine the 20X2 flexible budget variances.
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