Flexible budget, working backward. The Specialty Bearings Company designs and manu- factures ball bearings for extreme performance machinery. The following table is a partially completed variance analysis of Specialty Bearings' budgeted and actual results from sales of platinum bearings for the year ended December 31, 2010.

REQUIRED 1. Complete the variance analysis. Calculate all the required variances. If your work is accurate, you will find that the total static-budget variance is $0 (zero).
2. What are the actual and budgeted prices per unit? What are the actual and budgeted costs er unit?
oe Siehidty Bearings’ CEO was delighted with the lack of a static-budget variance. Was his reaction appropriate? Review the variances you have calculated and discuss possible causes and potential problems.LO1

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Actual Results Variance Analysis for Specialty Bearings for 2010, Incomplete Flexible-Budget Variances Flexible Budget Sales-Volume Variances Static Budget (1) (2) = (1) - (3) (3) (4) = (3) - (5) (5) Units sold 650,000 600,000 Revenues (sales) $4,290,000 $2,520,000 Variable costs 3,090,000 1,440,000 Contribution margin 1,200,000 1,080,000 Fixed costs 840,000 720,000 Operating income $ 360,000 $ 360,000 Total flexible-budget variance Total sales-volume variance Total static-budget variance