(Flexible Budget Variances) Providore Contractors shows the following actual versus budget report:
|
Budget |
Actual |
|
|
Units |
25,000 |
23,000 |
|
Selling price per unit |
$4 |
$4.10 |
|
Revenue |
$100,000 |
$94,300 |
|
Variable costs |
@ $2.50/unit |
@ $2.35/unit |
|
$62,500 |
$54,050 |
|
|
Contribution margin |
$37,500 |
$40,250 |
|
Fixed expenses |
$30,000 |
$31,500 |
|
Operating profit |
$7,500 |
$8,750 |
- Prepare a variance report and reconcile the budget and actual result.
- Prepare a flexible budget that explains the variances.