Top managers of Root Industries predicted 2010 sales of 15,000 units of its product at a unit price of \($7.50\) Actual sales for the year were 14,100 units at \($9.00\) each. Variable costs were budgeted at \($2.60\) per unit, and actual variable costs were \($2.70\) per unit.

Actual fixed costs of \($46,000\) exceeded budgeted fixed costs by $2,000.

Requirement 

1. Prepare Root’s income statement performance report. What variance contributed most to the year’s favorable results? What caused this variance?