Top managers of Smith Industries predicted 2018 sales of 14,400 units of its product at a unit price of $7.00. Actual sales for the year were 14,300 units at $10.00 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 $5,000.

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