top managers of Smith industries predicted 2020 for sales of 14,600 units of its product at the unit price of $9.00. Actual sales for the year were 14,400 units at $11. Each variable costs were budgeted at $2.20 per unit an actual variable cost for $2.30 per unit. Actual fix cost of $45,000 exceeded budget and fix cost by $3000.

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

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.

Smith Industries Flexible Budget Performance Report For the Year Ended December 31, 2024