2.

Bay City Companys fixed budget performance report for July follows. The $594,000 budgeted total expenses include $450,000 variable expenses and $144,000 fixed expenses. Actual expenses include $134,000 fixed expenses.

	Fixed Budget			Actual Results			Variances
Sales (in units)		8,100			7,000
Sales (in dollars)	$	648,000		$	623,000		$	25,000	U
Total expenses		594,000			563,000			31,000	F
Income from operations	$	54,000		$	60,000		$	6,000	U

BAY CITY COMPANY
Flexible Budget Performance Report
For Month Ended July 31
	Flexible budget	Actual results	Variances	Fav./Unf.
Sales
Variable expenses
Contribution margin
Fixed expenses
Income from operations

Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round your intermediate calculations. Round your final answers to whole dollars.)