Answer:
Flexible Contribution Margin <u>147,000</u>
<u>Actual </u>Contribution Margin <u>139,000</u>
<u>Variance 8000 unfavorable</u>
Explanation:
Engine Works Company
Flexible Budget Performance Report 
For the year using the Contribution Margin Format
                                       Actual                      Static                Flexible
                                     (21,000 units)       (20,000 units)     (21,000 units) 
Sales                       …$651,000                 $600,00             630,000 Fav
V. Cost of goods sold:   512,000              $ 460,000           483,000 Unfav
Direct materials .$231,000                      $200,000             210,000
Direct labor   168,000                               160,000               168,000
Variable overhead  73,500                        60,000               63,000
 Variable Operating Expenses 39,500       40,000             42,000
<u>Contribution Margin    $139,000                140,000          147,000  Unfav</u>
Fixed Expenses
Fixed Operating Expenses 12,000  12000           12000
Fixed overhead 77,500           80,000                  84,000
<u>Income from operations   $ 49,500    $ 48,000            $51,000  Fav</u>
<u></u>
<u>Working</u>
Flexible Calculations = (600,000/20,000)*21,000= $ 630,000
V. Cost of goods sold= ($ 460,000 /20,000)*21,000= 483,000
Direct materials .   =  $200,000 /20,000)*21,000=   210,000
Direct labor =    160,000/20,000)*21,000=    168,000
Variable overhead  =  60,000 /20,000)*21,000=    63,000
 Variable Operating Expenses =  40,000 /20,000)*21,000= 42,000
All calculations are carried out in the same way. Dividing the amount in the given budget with the number of units and multiplying it with actual number of units.
Flexible Contribution Margin 147,000 and Actual Contribution Margin 139,000 which shows a Variance  of 8000  which is unfavorable.