Amerfond,

Inc., produces the basic fillings used in many popular frozen desserts and treats-vanilla and chocolate ice creams, puddings, meringues, and fudge. Cascade uses standard costing and carries over no inventory from one month to the next. The ice-cream product group's results for June

2020

were as follows:

Performance Report, June 2020
	Actual Results	Static Budget
Units (pounds)	560,000	546,000
Revenues	$2,928,800	$2,893,800
Variable manufacturing costs	1,831,200	1,747,200
Contribution margin	$1,097,600	$1,146,600

Jason

Finkel,

the business manager for ice-cream products, is pleased that more pounds of ice cream were sold than budgeted and that revenues were up. Unfortunately, variable manufacturing costs wentup, too. The bottom line is that contribution margin declined by $49,000,which is less than 2% of the budgeted revenues of $2,893,800. Overall, Finkel feels that the business is running fine.

Requirements 1 and 2. Calculate the static-budget variance in units, revenues, variable manufacturing costs, and contribution margin. What percentage is eachstatic-budget variance relative to its static-budget amount? Break down each static-budget variance into a flexible-budget variance and a sales-volume variance.

Begin with the flexible budget columns, then enter in the sales volume variance and static budget variances. Finally, compute the static budget variance as a percentage of the static budget. Label each variance as favorable (F) or unfavorable (U). (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Round dollar amounts to the nearest whole dollar and percentages to two decimal places, X.XX%.)

		Flexible-
	Actual	Budget		Flexible
	Results	Variances		Budget
Units (pounds)	560,000	0		560,000
Revenues	$2,928,800	$39,200	U	$2,968,000
Variable mfg. costs	1,831,200	39,200	U	1,792,000
Contribution margin	$1,097,600	$78,400	U	$1,176,000

Sales-			Static-
Volume		Static	Budget
Variances		Budget	Variances