Top managers of Kyler Industries predicted 2014 sales of 14,800 units of its product at a unit price of $ 8.50. Actual sales for the year were 14,600 units at $ 10.50 each. Variable costs were budgeted at $ 2.20 per unit, and actual variable costs were $ 2.30 per unit. Actual fixed costs of $ 41,000 exceeded budgeted fixed costs by $ 4,500.

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