Top managers of McKnight Industries predicted 2018 sales of 14,400 units of its product at a unit price of $6.50. Actual sales for the year were 14,100 units at $11.00 each. Variable costs were budgeted at $2.80 per unit, and actual variable costs were $2.90 per unit. Actual fixed costs of $41,000 exceeded budgeted fixed costs by $2,000.

Prepare McKnight's flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance?