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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
$5.60
Selling and Promotion Expense $210,000
$0.80
Building Occupancy Expense $190,000
$0.10
Buying Expense $140,000
$0.30
Delivery Expense $105,000
$0.05
Credit and Collection Expense $78,000
$0.02
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 1,050,000, and total revenue was $10,500,000. Actual costs in 2012 were:

Cost of Goods Sold $6,000,000
Selling and Promotion Expense $1,000,000
Building Occupancy Expense $320,000
Buying Expense $590,000
Delivery Expense $180,000
Credit and Collection Expense $20,000
Required
Compute the flexible-budget variances for the following two cost items (enter favorable variances as positive numbers and unfavorable variances as negative numbers):

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

1) Credit and Collection Expense?
2) Cost of Goods Sold ?

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