Performance Report
Year Ended December 31, 2014
	Actual	Flexible-Budget	Flexible	Sales-Volume	Static
	Results	Variances	Budget	Variances	Budget
Units sold	100,000				96,000
Revenues (sales)	$650,000				$326,400
Variable costs	440,000				201,600
Contribution margin	210,000				124,800
Fixed costs	180,200				95,000
Operating income	$29,800				$29,800

The Putnam Company produces engine parts for car manufacturers. A new accountant intern at Putnam has accidentally deleted the calculations on the company's variance analysis calculations for the year ended December 31, 2014.

The following table is what remains of the data

Requirements

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?

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

Begin with the flexible budget columns, then the sales volume variance column. 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 your answers to the nearest whole dollar.)

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	Actual	Flexible-Budget		Flexible
	Results	Variance		Budget
Units sold	100,000
Revenues (sales)	$650,000
Variable costs	440,000
Contribution margin	210,000
Fixed costs	180,200
Operating income	$29,800

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