Reference no: EM132596016

Question - Katy Company produces engine parts for the computer manufacturing company. The following table is the Katy's performance report for the year 2016.

Actual Results Flexible Budget

Master Budget Sales Volume (in units) 1,900 2,000

Sales Revenues (in $) $30,000 $32,000

Less: Variable Costs 15,500 15,000

Contribution Margin Less: Fixed Costs 12,500 13,000

Operating Income

Required)

a) Fill out the blank cells with appropriate variance names or numbers. Also indicate if the variance is favorable (F) or Unfavorable (U).

b) Explain the source of variances.