Respuesta :
Answer:
The preparation of the flexible budget performance report for the year is presented below:
Explanation:
The preparation of the flexible budget performance report for the year
Flexible budget performance report
Flexible budget Actual results Variance fav or unfav
sales $520,000 $480,000 $40,000 Unfav
variable cost ($104,000) ($112,000) $8,000 Unfav
Contribution margin $416,000 $368,000 $48,000 Unfav
Fixed cost ($150,000) ($145,000) $5,000 Fav
Net operating
income $266,000 $223,0 00 $43,000 Unfav
Working Notes:
The selling price per unit is
= $400,000 ÷20,000 units
= $20 per unit
So total sales = 26,000 units × $20 = 520,000
And,
Variable cost per unit is
= $80,000 ÷ 20,000 units
= 4 per unit
So, variable cost is = $4 × 26,000 units = $104,000
If actual sales is less than the flexible budgets sales than it leads to unfavorable variance else it is favorable variance
