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Top managers of

ColeCole

Industries predicted

20182018

sales of

15 comma 20015,200

units of its product at a unit price of

$ 10.00$10.00.

Actual sales for the year were

14 comma 30014,300

units at

$ 11.00$11.00

each. Variable costs were budgeted at

$ 2.80$2.80

per unit, and actual variable costs were

$ 2.90$2.90

per unit. Actual fixed costs of

$ 50 comma 000$50,000

exceeded budgeted fixed costs by

$ 5 comma 500$5,500.

Prepare

ColeCole's

flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance?

Cole Industries

Flexible Budget Performance Report

For the Year Ended December 31, 2018

1

2

3

4

5

(1) - (3)

(3) - (5)

Budget

Flexible

Sales

Amounts

Actual

Budget

Flexible

Volume

Static

Per Unit

Results

Variance

Budget

Variance

Budget

Units

14300

14300

15200

Sales Revenue

10

157300

143000

Variable Costs

2.90

41470

40040

Contribution Margin

115830

102960