Top managers of Kyler Industries predicted 2016 sales of 14,600 units of its pro
ID: 2593159 • Letter: T
Question
Top managers of Kyler Industries predicted 2016 sales of 14,600 units of its product at a unit price of $8.50. Actual sales for the year were 14,200 units at $9.50 each. Variable costs were budgeted at $2.80 per unit, and actual variable costs were $2.90 per unit. Actual fixed costs of $48,000 exceeded budgeted fixed costs by $2,000 Prepare Kyler'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 "O" for any zero balances. For any $0 variances, leave the Favorable (FyUnfavorable (U) input blank.) Kyler Industries Flexible Budget Performance Report For the Year Ended December 31, 2016 4. Budget Amounts Per Unit Flexible Budget Variance Sales Volume Variance Actual Flexible Static Results Budget Budget Units Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income What variance contributed most to the year's favorable results? What caused this variance? The variance contributing most to the year's excellent results is the favorable . This variance resulted from selling the company's product atExplanation / Answer
Budgeted Actual flexible Flexible Sales Static amounts results budget budget Volume budget per unit variance Variance units 14,200 14,200 14,600 Sales Revenue 8.5 134900 14,200 F 120700 3400U 124100 Variable costs 2.8 41,180 1420U 39760 1120F 40880 Contribution margin 5.7 93,720 12,780F 80940 2280F 83220 Fixed costs 48,000 2000U 46,000 0 N 46,000 operating income 45,720 10780F 34,940 2,280 U 37,220 Flexible budget variance Sales volume variance 10,780 F 2,280 U Sales budget variance 8500 F