QUESTION 1 (40 points)

CC Corp estimated the following financial data, for the 2020 production budget:

Sales of 122,000 units

Sales price of $40 per unit

Variable expenses of $9.90 per unit

Fixed costs of $3,050,000 for the year

At year end, actual sales data and costs were:

Sales of 125,000 units

Sales price of $38 per unit

Variable expenses of $10.50 per unit

Fixed costs of $3,000,000 for the year

A.Create an Income Statement Performance Report, including favourable/unfavourable ratings for all Flex Budget Variances and Sales Volume Variances.

B.Briefly explain the operating income flex budget result.

C.If the Direct Materials Price Variance was $50,000 Favourable, and the Direct Materials Efficiency Variance was $90,000 Unfavourable, what was the Direct

Labour Flex Budget Variance?Assume that the only other variable expense was variable overhead, and that its flex budget variance was zero.

QUESTION 2 (40 points)

Outdoor Inc recorded the following flex budget and actual results during November 2019: