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Vincent Inc. prepared a budget last period that called for sales of 50,000 units at a price of $30 each. The costs per unit were

Vincent Inc. prepared a budget last period that called for sales of 50,000 units at a price of $30 each. The costs per unit were estimated to amount to $15 variable and $8 fixed. During the period, production was equal to actual sales of 45,000 units. The selling price was $32 per unit. Variable costs were $14.00 per unit. Fixed costs actually incurred were $350,000.

Required:

  1. Prepare a report to show the difference between the actual contribution margin per the static budget and the budgeted contribution margin per the flexible budget.
  2. Explain the significance of the comparisons.

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