Adarmes Adventures manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets: 2,500 canoes, 3,000 canoes, and 3,500 canoes. Canoes sell for $800 each. The standard variable cost information for a canoe is as follows.

Direct materials		$	300
Direct labor			150
Variable overhead
Utilities			35
Indirect material			30
Indirect labor			60
Total		$	575

Annual fixed overhead cost is expected to be:

Maintenance		$	20,000
Depreciation			40,000
Insurance			27,000
Rent			30,000
Total		$	117,000

Alexis King chose to prepare a static budget based on sales of 3,000 canoes. Actual sales were 3,100 canoes at a price of $850 each. The company incurred the following costs for the year:

Direct material	$	910,000
Direct labor		435,000
Variable overhead		398,000
Fixed overhead		125,000
Total	$	1,868,000

Prepare a performance report for the year that shows the flexible budget and sales volume variances. (If operating income is negative, enter amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to 0 decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance Static Budget Unit sales 3000 100 Favorable 3100 O Favorable 3100 24,00,000 80,000 IT Favorable 24,80,000 1,55,000TFavorable 26,35,000 Sales revenue Less Varlable expenses Direct material 9,00,000 30,000 Unfavorable 9,30,000 20,000! Favorable 9,10,000 Direct labor 4,50,000 15,000 T Unfavorable 4,65,000 30,000! Favorable 4,35,000 3,75,000 12,500 Unfavorable 3,87,500 10,500 Unfavorable 3,98,000 Total variable expenses 17,25,000 57,500 Unfavorable 17,82,500 39,500 Favorable 17,43,000 Contribution margin 6,75,000 22,500 0Favorable 6,97,500 1,94,500Favorable 8,92,000 1,17,000 Not Applicable 1,17,000 8,000 Unfavorable 1,25,000 Operating income 5,58,000 22,500 TT Favorable 5,80,500 1,86,500 TFavorable 7,67,000