Flexible-budget preparation and analysis. Bank Management Printers Inc. produces lux-

Total flexible-budget variance ury chequebooks with three cheques and stubs per page. Each chequebook is designed for an

$19,800 F individual customer and is ordered through the customer’s bank. The company’s operating budget for September 2010 included these data:

The executive vice-president of the company observed that the operating income for September was much less than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. You have been asked to provide explanations for 352 | cuapter7 the disappointing September results. Bank Management develops its flexible-budget-based budgeted revenue per output unit and variable costs per output unit without a detailed analysis of budgeted inputs.
REQUIRED 1. Prepare a Leyel 1 analysis of the September performance.
2. Prepare a Level 2 analysis of the September performance.
3. Why might Bank Management find the Level 2 analysis more informative than the Level 1 "analysis? Explain your answer.LO1

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Number of chequebooks Selling price per book 15,000 $ 20 Variable costs per book $ 8 Total fixed costs for the month $145,000 The actual results for September 2010 were Number of chequebooks produced and sold Average selling price per book Variable costs per book Total fixed costs for the month 12,000 $ 21 $ 7 $150,000