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Top managers of Preston Industries predicted 2018 sales of 14900 units of its product at a unit price of $6. Actual sales for the year were 14,800...
Top managers of Preston Industries predicted 2018 sales of 14900 units of its product at a unit price of $6.50. Actual sales for the year were 14,800 units at $8.50 each. Variable costs were budgeted at $2.40 per unit, and actual variable costs were $2.50 per unit. Actual fixed costs of $46,000 exceeded budgeted fixed costs by $5,500.
Prepare Preston's flexible budget performance report. What variance contributed most to the year's favorable results? what caused this variance?
Prepare: flexible budget performance report for the year. First, complete the flexible budget performance report through the contribution margin line, then complete the report through the operating income line. Finally, compute the total variances (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F) unfavorable (U) input blank)
Preston Industries
Flexible Budget Performance Report
For the year Ended December 31, 2018
1 2 3 4 5
(1) - (3) (3) - (5)
____________________________________________________________________________________________________________________
Budget Flexible Sales
Amounts Actual Budget Flexible Volume Static
Per unit Results Variance Budget Variance Budget
_____________________________________________________________________________________________________________________
Units ____________ _______________ ______________
_____________________________________________________________________________________________________________________
Sales Revenue _______ __________ _________ __ ______________ ___________ __ _________________
Variable Costs _______ __________ _________ __ ______________ ___________ __ _________________
Contribution Margin __________ _________ __ ______________ ___________ __ _________________
Fixed Costs __________ _________ __ ______________ ___________ __ _________________
Operating Income __________ _________ __ ______________ ___________ __ _________________
Flexible Budget Variance Sales Volume Variance
$ ____________ __ $ __________ __
________________________________________________________________________
Static Budget Variance
$ _________________ __
