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# Variance between flexible budget and actual results

Davis Company provides the following information budgeted for 2007.

Sale price \$50 by unit
Cost to manufacture variable \$32 by unit
Fixed cost of manufacture \$100,000
Fixed cost of sales and administrative \$40,000

Davies predicted that the sales will be of 20.000 units, but the current sales were 22,000 units. The current price of sale was of \$ 48,50 by unit, and the costs current variables of production were of \$33 by unit. Current fixed costs of production and fixed costs of sale and administrative they were of \$104.000 and \$39.000, respectively.

It required:

A) To utilize the form that appears subsequently, prepare the flexible budget; to present the current results; to determine the varying of the flexible budget; to indicate if the differences are favorable (F) or unfavorable (D).

Flexible Current Variance Favoralbe or
budget results Budget Unfavorable
Flexible

1.Number of
units Sales
2.Variable
costs of
manufacture
3.Contributive
margin
4.Fixed costs
of manufacture
5.Fixed costs of
sales and