Sales managers of Zeeman Industries predicted the following year’s sales of 150,000 units of its product at a unit price of $9.00. Actual sales for the year were 144,000 units at $11.60 each. Variable expenses were budgeted at $2.50 per unit, and actual variable expenses were $2.80 per unit. Actual fixed expenses of $430,000 exceeded budgeted fixed expenses by $27,500.
a)Prepare report showing actual results, a static budget and a flexible budget.
b)Explain the significance of a flexible budget versus a static budget.
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