Norland-Norge AS produces corporate notebooks. Each notebook is designed for an individual customer. The company’s operating budget for September 2022 included these data:

The actual results for September 2022 were:

The managing director of the company observed that the operating profit for September was much less than anticipated, despite a higher-than-budgeted selling price and a lower-than- budgeted variable cost per unit. You have been asked to provide explanations for the disappointing September results.
Norland-Norge develops its flexible budget on the basis of budgeted revenue per output unit and variable costs per output without a detailed analysis of budgeted inputs.
Required

1 Prepare a Level 1 analysis of the September performance.
2 Prepare a Level 2 analysis of the September performance.
3 Why might Norland-Norge find the Level 2 analysis more informative than the Level 1 analysis?
Explain your answer.

Transcribed Image Text:

Number of notebooks Selling price per book Variable costs per book Total fixed costs for the month 15 000 NKR 20 NKR 8 NKR 145 000