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Question - Top managers of Root Industries predicted 2024 sales of 14,600 units of its product at a unit price of $8.00. Actual sales for the year were 14,200 units at $12.50 each. Variable costs were budgeted at $2.80 per? unit, and actual variable costs were $2.90 per unit. Actual fixed costs of $45,000 exceeded budgeted fixed costs by $3,500.
Required -
Prepare Root's flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance?
Prepare the 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.
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