Static and Flexible Budgets Graham Corporation used the following data to evaluate its current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit.

		Actual	Budgeted
Units sold		685,000	700,000
Variable costs		1,850,000	2,100,000
Fixed costs		1,525,000	1,485,000

a. Prepare the actual income statement, flexible budget, and static budget.

Do not use negative signs with any of your answers below.

		Actual Results	Flexible Budget	Static Budget
Units sold		Answer	Answer	Answer
Revenues		$Answer	$Answer	$Answer
Variable costs		Answer	Answer	Answer
Contribution margin		Answer	Answer	Answer
Fixed costs		Answer	Answer	Answer
Operating income		$Answer	$Answer	$Answer

For questions b., c., and d., do not use negative signs with your answers. Select either U for Unfavorable or F for Favorable using the drop down box next to each of your variance answers.

b. What is the static-budget variance of revenues?

c. What is the flexible budget variance for variable costs?

d. What is the flexible budget variance for fixed costs?