You're supposed to use the data for budget and actual as given in Exhibit 8-12, as the basis to prepare a flexible budget for the company at forecasted revenue levels of $12.6 million, $13 million, and $13.4 Million. What you have in exhibit 8-12 (left column) is a static budget at $13 million (compared to actual revenue level of $12.7 Million in the middle column), which (the left column, I mean) you can use to get the total fixed costs and unit-variable cost relationships to adapt to the 2 other flexible budget levels required (12.6 and 13.4M). You are to use the format of Exhibit 8.3 in designing and preparing the flexible budget. Then in part 3 they want you to use the format on Exhibit 8-6, to take your original static budget, Exhibit 8-12 and break out that static budget information into flexible budget variances and sales activity variances. So you're using all 3; exhibit 8-12 is needed to get the actual cost relationships to apply to the 2 other levels of budgeted number, exhibit 8.3 is needed to see how to set up the flexible budget, and Exhibit 8.6 to do the static budget and activity variances.
Where asked, you must say whether a particular variance is favorable (F) or unfavorable (U) in order to receive full credit. Total cost formula: $"[____?____]" per quarter (fixed cost) plus ."[__%]" (variable cost) of revenue (please answer & it is listed in the table.
Please use % as show in table IE: 4% no decimal numbers.