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Here is the data that Vroom-Vroom used for their budgets:

Monthly Budget Data:
Selling Price per uniit:	$ 70.00	each
Raw Materail Cost	$ 30.00	each
Packaging Costs	$ 10.00	each
Electricity	$ 3.00	each
Waste and Other Costs	$ 5.00	each
Salary and Wages Costs	$ 450,000	per month
Fringe Benefits	50%	of Salaries
Rent Costs	$ 500,000	per month
Insurance Costs	$ 70,000	per month
Depreciation Costs	$ 250,000	per month

Vroom-Vroom estimated sales/production will be between 100,000 and 300,000 cars per month. Their static budget is based on 200,000 cars sold per month. Assume that all units produced in a month are also sold in that month. Vroom-Vrooms unit of production/sale is a car (unit/each).

Here are the Actual Results in December and January:

Actual Data:		December	January
Production (Units)		375,000	150,000
Revenue		$ 26,300,000	$ 10,300,000
Raw Materials		$ 11,348,500	$ 4,485,000
Packaging Materials		$ 3,720,000	$ 1,445,000
Electricity		$ 1,125,000	$ 460,000
Waste and Other Costs		$ 1,888,000	$ 750,000
Wages		$ 500,000	$ 450,000
Fringe Benefits		$ 250,000	$ 225,000
Rent		$ 500,000	$ 500,000
Insurance		$ 70,000	$ 75,000
Depreciation		$ 250,000	$ 240,000

Question 2: Prepare a flexible budget in Excel for Vroom-Vroom.

1. Show the flexible budget for December in Contribution Margin Income Statement format.
2. Compare Decembers flexible budget to Decembers actual results. Specify which line items are favorable or unfavorable and how much.
3. For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for December. Provide potential explanations
4. Show the flexible budget for January in Contribution Margin Income Statement format.
5. Compare Januarys flexible budget to Januarys actual results. Specify which line items are favorable or unfavorable and how much.
6. For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for January. Provide potential explanations for each one.

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