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Following is the static budget and actual results of Yoga Inc. for the month of April...

Following is the static budget and actual results of Yoga Inc. for the month of April 20X4.

The management is pleased with the income higher than budgeted. However they understand that significant increase in units sold renders the comparison of actual results and the static budget unfair.

Required: You are required to prepare a flexible budget at actual level of output and calculate flexible budget variances.

Actual

Static

Units

40,000

30,000

Revenue

236,000

180,000

Variable Costs:

Material

76,000

60,000

Labor

63,200

45,000

Factory Overhead

34,000

24,000

Contribution Margin

62,800

51,000

Fixed Costs:

Factory Overhead

12,880

12,000

Office Expenses

22,000

20,000

Operating Income

27,920

19,000
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