The master budget for the year just ended was on a computer that was just hacked. You feel responsible because you didnt install anti-hacking software on the computer and you didnt have a backup file. Rather than admit your mistake to your supervisor, you are trying to reconstruct the budget. You have learned the following information.

Sales volume		208,000	units
Sales revenue	$	1,173,000
Variable costs:
Manufacturing		380,000
Marketing and administrative		91,400
Fixed costs:
Manufacturing		265,000
Marketing and administrative		112,000
Operating profit	$	324,600

You know that the company planned to sell 190,000 units at a price of $5 each. Variable marketing and administrative costs are budgeted at 12 percent of revenue. You have discovered that the manufacturing fixed costs are budgeted to be $1.50 per unit at the budgeted volume. You know that the company policy is to budget for an operating profit of one dollar per unit. Finally, you recall that the master budget for fixed marketing and administrative costs is $95,000.

Required: Prepare a report explaining the differences between the actual results, flexible budget, and the master budget. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

Required: Prepare a report explaining the differences between the actual results, flexible budget, and the master budget. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Profit Variance Analysis MA Actual Manufacturing Variance Marketing and Administrative Variance Sales Price Variance Flexible Budget Sales Activity Variance Master Budget 208,000 1,173,000 $ Sales units Sales revenue Variable costs: Manufacturing Marketing and administrative Contribution margin Fixed costs: Manufacturing Marketing and administrative Operating profit 380,000 91,400 701,600 265,000 112,000 324,600