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Nina Company prepared the following fixed budget for July using 7,900 units for budgeted sales. Actual sales were 7,600 units and actual costs are shown
Nina Company prepared the following fixed budget for July using 7,900 units for budgeted sales. Actual sales were 7,600 units and actual costs are shown below.
Fixed Budget
For Month Ended July 31
Variable Amount per Unit
Total Fixed Cost
Fixed Budget (7,900 units)
Actual Results (7,600 units)
Sales
$ 100
$ 790,000
$ 776,400
Variable costs
Direct materials
35
276,500
281,200
Direct labor
15
118,500
115,600
Indirect materials
4
31,600
29,800
Sales commissions
11
86,900
82,600
Total variable costs
65
513,500
509,200
Contribution margin
$ 35
$ 276,500
$ 267,200
Fixed costs
DepreciationMachinery
$ 72,000
72,000
72,000
Supervisor salary
42,700
42,700
44,000
Insurance
10,600
10,600
10,600
DepreciationOffice equipment
7,800
7,800
7,800
Administrative salaries
33,900
33,900
31,400
Total fixed costs
$ 167,000
167,000
165,800
Income
$ 109,500
$ 101,400
Prepare a flexible budget performance report for July at activity level of 7,600 units. Show variances between budgeted and actual amounts. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.)
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