7-24Flexible budget, working backward.The Alpha Company manufactures designer jewelryfor jewelry stores. A new accountant intern at Alpha Company has accidentally deleted the calcula-tions on the companys variance analysis calculations for the year ended December 31, 2017. Thefollowing table is what remains of the data.

Performance Report, Year Ended December 31, 2017

	ActualResults	Flexible-BudgetVariances	FlexibleBudget	Sales-VolumeVariances	StaticBudget
Units sold	150000				140000
Revenues (sales)	975000				630000
Variable costs	675000				350000
Contribution margin	300000				280000
Fixed cost	150000				130000
Operating income	150000				150000

Required:

1.Calculate all the required variances. (If your work is accurate, you will find that the total static-budget variance is $0.)

2.What are the actual and budgeted selling prices? What are the actual and budgeted variable costs per unit?

3.Review the variances you have calculated, and discuss possible causes and potential problems. What is the important lesson learned here?