Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customer's bank. The company's operating budget for September

2017

included these data:

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The budgeted amounts for September

2017

were:

Number of checkbooks	15,000
Selling price per book	$20
Variable cost per book	$8
Fixed costs for the month	$145,000

The actual results for September

2017

were as follows:

Number of checkbooks produced and sold	12,000
Average selling price per book	$21
Variable cost per book	$7
Fixed costs for the month	$150,000

The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higher-than-budgeted selling price and alower-than-budgeted variable cost per unit. As the company's management accountant, you have been asked to provide explanations for the disappointing September results.

Bank Management

develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs without detailed analysis of budgeted inputs.

1.

Prepare a static-budget-based variance analysis of the September performance.

Begin with the actual results, then compute the static budget and the static-budget variances. Label each variance as favorable or unfavorable. (Enter an operating loss with a minus sign orparentheses.)

	Actual
	Results
Units sold
Revenues
Variable costs
Contribution margin
Fixed costs
Operating income (loss)

2.

Prepare a flexible-budget-based variance analysis of the September performance.

3.

Why might

Bank Management

find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? Explain your answer.