Static and Flexible Budgets
Graham Corporation used the following data to evaluate its currentoperating system. The company sells items for $10 each and used abudgeted selling price of $10 per unit.
| | Actual | Budgeted |
|---|
| Units sold | | 794,000 | 800,000 |
| Variable costs | | 1,745,000 | 2,000,000 |
| Fixed costs | | 1,420,000 | 1,375,000 |
a. Prepare the actual income statement, flexible budget, andstatic budget.
Do not use negative signs with any of your answers below.
| | Actual Results | Flexible Budget | Static Budget |
|---|
| Units sold | | Answer | Answer | Answer |
| Revenues | | Answer | Answer | Answer |
| Variable costs | | Answer | Answer | Answer |
| Contribution margin | | Answer | Answer | Answer |
| Fixed costs | | Answer | Answer | Answer |
| Operating income | | Answer | Answer | Answer |
For questions b., c., and d., do not use negative signs withyour answers. Select either U for Unfavorable or F for Favorableusing the drop down box next to each of your variance answers.
b. What is the static-budget variance of revenues?
$Answer AnswerFU
c. What is the flexible budget variance for variable costs?
$Answer AnswerFU
d. What is the flexible budget variance for fixed costs?
$Answer AnswerFU
