Katy Company produces engine parts for the computer manufacturing company. The following table is the Katys performance report for the year 2016.

	Actual Results		Flexible Budget		Master Budget
Sales Volume (in units)	1,900				2,000
Sales Revenues (in $)	$30,000				$32,000
Less: Variable Costs	15,500				15,000
Contribution Margin
Less: Fixed Costs	12,500				13,000
Operating Income

Required)

a) Fill out the blank cells with appropriate variance names or numbers. Also indicate if the variance is favorable (F) or Unfavorable (U) (20 points).

b) Explain the source of variances (5 pts)