a.
Actual | Flexible | Static | |
Units sold | 495000 | 495000 | 500000 |
Revenues | $ 49,50,000 | $ 49,50,000 | $ 50,00,000 |
Variable Costs | $ 12,50,000 | $ 14,85,000 | $ 15,00,000 |
Contribution Margin | $ 37,00,000 | $ 34,65,000 | $ 35,00,000 |
Fixed Costs | $ 9,25,000 | $ 9,00,000 | $ 9,00,000 |
Operating Income | $ 27,75,000 | $ 25,65,000 | $ 26,00,000 |
b. Static Budget Variance (Revenue) = $5000000 - $4950000 = $50000 (U)
c. Flexible Budget Variance (Variable Costs) = $1485000 - 1250000 = $235000 (F)
d. Flexible Budget Variance (Fixed Costs) = $925000 - 900000 = $25000 (U)
Static and Flexible Budgets Graham Corporation used the following data to evaluate its current operating system....
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