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Question - Samson Inc. prepared a budget last period that called for sales of 40,000 units at a price of $25 each. The costs per unit were estimated to amount to $13 variable and $6 fixed. During the period, production was equal to actual sales of 38,000 units. The selling price was $26 per unit. Variable costs were $13.25 per unit. Fixed costs actually incurred were $250,000.
Required:
a) Prepare report to show the difference between the actual contribution margin per the static budget and the budgeted contribution margin per the flexible budget.
b) Explain the significance of the comparisons.
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