Top managers of Root Industges predicted 2025 sales of 14,500 units of its product at a unit price of $9 50. Actual sales for the year were 14,300 units at $11.00 each. Variable costs were budgeted at $3.40 per unit, and actual variable costs were $3.50 per unit. Actual fixed costs of $44,000 exceeded budgeted fixed costs by $5,000 Prepare Root Industries' 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. Label the variance as favorable (F) or unfavorable (U), in the input field after the amount you enter. For any $0 variances, leave the Favorable (FYUnfavorable (U) input field blank.) Units Sales Revenue Variable Costs Contribution Margin Budget Amounts Per Unit 9.5 3.4 Root Industries Flexible Budget Performance Report For the Year Ended December 31, 2025 1 3 Actual Results 14300 157300 2 (1)-(3) Flexible Budget Variance 21450 F U Flexible Budget 14300 135850 4 (3)-(5) Sales Volume Variance CEEEE U F U 5 Static Budget 14500 140300
Top managers of Root Industges predicted 2025 sales of 14,500 units of its product at a unit price of $9 50. Actual sales for the year were 14,300 units at $11.00 each. Variable costs were budgeted at $3.40 per unit, and actual variable costs were $3.50 per unit. Actual fixed costs of $44,000 exceeded budgeted fixed costs by $5,000 Prepare Root Industries' 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. Label the variance as favorable (F) or unfavorable (U), in the input field after the amount you enter. For any $0 variances, leave the Favorable (FYUnfavorable (U) input field blank.) Units Sales Revenue Variable Costs Contribution Margin Budget Amounts Per Unit 9.5 3.4 Root Industries Flexible Budget Performance Report For the Year Ended December 31, 2025 1 3 Actual Results 14300 157300 2 (1)-(3) Flexible Budget Variance 21450 F U Flexible Budget 14300 135850 4 (3)-(5) Sales Volume Variance CEEEE U F U 5 Static Budget 14500 140300
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 26BEB: Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes...
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Transcribed Image Text:Top managers of Root Industries predicted 2025 sales of 14,500 units of its product at a unit price of $9.50. Actual sales for the year were 14,300 units at $11.00 each. Variable costs were budgeted at $3.40 per unit, and actual variable
costs were $3.50 per unit. Actual fixed costs of $44,000 exceeded budgeted fixed costs by $5,000
Prepare Root Industries' 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. Label the variance as favorable (F) or unfavorable (U), in the input field after the amount you enter. For any $0 variances, leave the Favorable (F)Unfavorable (U) input field blank.)
Units
Sales Revenue
Variable Costs
Contribution Margin
Budget
Amounts
Per Unit
9.5
3.4
Root Industries
Flexible Budget Performance Report
For the Year Ended December 31, 2025
1
3
Actual
Results
14300
157300
2
(1)-(3)
Flexible
Budget
Variance
21450 F
U
F
Flexible
Budget
14300
135850
(3) - (5)
Sales
Volume
Variance
CAR
DOD
5
Static
Budget
14500
140300
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