Top managers of Cole Industries predicted 2018 sales of 14,600 units of its product at a unit price of $7.00. Actual sales for the year were 14,000 units at $10.50 each. Variable costs were budgeted at $2.60 per unit, and actual variable costs were $2.70 per unit. Actual fixed costs of $43,000 exceeded budgeted fixed costs by $4,500. Prepare Cole's flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance? Prepare a flexible budget performance report for the year. First, complete the flexible budget performance report through the contribution margin line, then complete the report through the operating income line. Finally, compute the total variances. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.) Cole Industries Flexible Budget Performance Report For the Year Ended December 31, 2018 1 2 3 4 5 (1) - (3) (3) - (5) Budget Flexible Sales Amounts Actual Budget Flexible Volume Static Per Unit Results Variance Budget Variance Budget Units Sales Revenue Variable Costs

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...

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Question

Top managers of

Cole

Industries predicted

2018

sales of

14,600

units of its product at a unit price of

$7.00.

Actual sales for the year were

14,000

units at

$10.50

each. Variable costs were budgeted at

$2.60

per unit, and actual variable costs were

$2.70

per unit. Actual fixed costs of

$43,000

exceeded budgeted fixed costs by

$4,500.

Prepare

Cole's

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

Prepare a flexible budget performance report for the year. First, complete the flexible budget performance report through the contribution margin line, then complete the report through the operating income line. Finally, compute the total variances. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.)

Cole Industries
Flexible Budget Performance Report
For the Year Ended December 31, 2018
		1	2	3	4	5
			(1) - (3)		(3) - (5)
	Budget		Flexible		Sales
	Amounts	Actual	Budget	Flexible	Volume	Static
	Per Unit	Results	Variance	Budget	Variance	Budget
Units
Sales Revenue
Variable Costs
Contribution Margin

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