Top managers of Preston Industries predicted 2024 sales of 14,900 units of its product at a unit price of $8.00. Actual sales for the year were 14,700 units at $10.50 each. Variable costs were budgeted at $2.40 per unit, and actual variable costs were $2.50 per unit. Actual fixed costs of $41,000 exceeded budgeted fixed costs by $2,500. Prepare Preston's flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance?

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Part 1

Prepare a flexible budget performance report for the year. First, complete the flexible budget performance report through the contribution margin line, then complete the report through the operating income line. Finally, compute the total variances. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.)

Preston Industries
Flexible Budget Performance Report
For the Year Ended December 31, 2024
		1	2		3	4		5
			(1) - (3)			(3) - (5)
	Budget		Flexible			Sales
	Amounts	Actual	Budget		Flexible	Volume		Static
	Per Unit	Results	Variance		Budget	Variance		Budget
Units		14,700			14,700			14,900
Sales Revenue	$8.00	$154,350		F			U	$119,200
Variable Costs	2.40			U			F	35,760
Contribution Margin				F			U	83,440