The accountant for a subunit of Racer Sports Company went on vacation before completing the subunit€™s monthly performance report. This is as far as she got:

Requirements
1. Complete the performance evaluation report for this subunit.
2. Based on the data presented, what type of responsibility centre is this subunit?
3. Which items should be investigated if part of management€™s decision criteria is to investigate all variances exceeding $15,000? Interpret your results. (What could cause these variances? What impact might these variances have on company inventory levels and operations?)

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Flexible Budget Flexible Volume (Master) Sales Static Racer-Subunit X Revenue by Product Actual Variance Budget Variance Budget Downhill 326,000 155,000 $20,000 (F) 300,000 150,000 Model Rl $165,000 Cross-Country Model EXI Model EXII 283,000 $2,000 (U) 285,000 252,000 300,000 245,000 17,500 (U) 262,500 Snowboard 400,000 $1,412,500 Total $1,441,000 5,000 (F)