Profit variance analysis. Diaz Company prepared a budget last period that called for sales of 14,000 units at a price of $12 each. Variable costs per unit were budgeted to be $5. Fixed costs were budgeted to be $21,000 for the period. During the period, production was exactly equal to actual sales of 14,200 units. The selling price was $12.15 per unit. Variable costs were $5.90 per unit. Fixed costs were $20,000.

Conduct a profit variance report showing master budget variances and flexible budget variances. Indicate whether each variance calculated is favorable or unfavorable.

	Actual	Master
units	14,200	14,000
selling price/unit	12.15	12.00
sales	172,530	168,000
variable cost/unit	5.90	5.00
total variable costs	83,780	70,000
total fixed costs	20,000	21,000

		flexible			sales			master
		budget		flexible	volume		master	budget
	actual	variance	F(U)	budget	variance	F(U)	budget	variance	F(U)
sales	172,530			170,400			168,000
total variable costs	83,780			71,000			70,000
total contribution margin	88,750			99,400			98,000
total fixed costs	20,000			21,000			21,000
operating profit	68,750			78,400			77,000