The fixed budget for 20,000 units of production shows sales of $400,000; variable costs of $80,000; and

Question:

The fixed budget for 20,000 units of production shows sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. The company’s actual sales were 26,000 units at $480,000. Actual variable costs were $112,000 and actual fixed costs were $145,000. Prepare a flexible budget performance report. Indicate whether each variance is favorable or unfavorable.