Douglas Company Provided the Following Budgeted Information for the Current

Essay

Douglas Company provided the following budgeted information for the current year.
$$\begin{array} { l r r } \text { Sales price } & \$ 50 \text { per unit } \\\text { Variable manufacturing cost } & 32 \text { per unit } \\\text { Fixed manufacturing cost } & \$ 100,000 \text { total } \\\text { Fixed selling and administrative cost } & \$ 40,000 \text { total }\end{array}$$ Douglas predicted that sales would be 20,000 units,but the sales actually were 22,000 units.The actual sales price was $48.50 per unit,and the actual variable manufacturing cost was $33 per unit.Actual fixed manufacturing cost and fixed selling and administrative cost were $104,000 and $39,000,respectively.
Required:
(a)Using the form below,prepare a flexible budget,show actual results,calculate the flexible budget variances,and indicate whether the variances are favorable (F)or unfavorable (U).
(b)Assess the company's performance compared to the flexible budget.