Question:
(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.