Compute sales volume and flexible budget variances (Learning Objective 2)

Top managers of Manion Industries predicted 2008 sales of 145,000 units of its product at a unit price of $8. Actual sales for the year were 140,000 units at $9.50 each. Variable expenses were budgeted at $2.20 per unit, and actual variable expenses were $2.30 per unit. Actual fixed expenses of $420,000 exceeded budgeted fixed expenses by $20,000. Prepare Manion Industries’ income statement perfor¬ mance report in a format similar to El 1-20. What variance contributed most to the year’s favorable results? What caused this variance?