The Groton Company produces engine parts for car manufacturers. A new accountant intern at Groton has accidentally deleted the calculations on the company's variance analysis calculations for the year ended December 31, 2017.

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?

Performance Report Year Ended December 31, 2017 Flexible-Budget Flexible Variances Budget Actual Results 106,000 Sales-Volume Variances Static Budget 95,000 Units sold Revenues (sales) $ $ 683,700 430,000 389,500 213,750 Variable costs Contribution margin Fixed costs 253,700 207,950 175,750 130,000 $ 45,750 $ 45,750 Operating income