The flexible budget variance is the difference between the flexible budget amount and the actual result. By subtracting the actual result of $35,000 from the flexible budget of $62,000, we obtain a variance of $27,000. This figure indicates how well the company controlled its costs or generated revenue relative to the standards set for the actual level of production.

The margin of safety measures the amount by which actual or budgeted sales exceed the break-even point. It indicates the risk level of a business; a higher margin provides a buffer against potential losses. It is calculated as Budgeted Revenue minus Break-even Revenue. Here, $50,000 - $35,000 equals $15,000, representing the sales volume that can be lost before the company incurs a loss.

The flexible budget variance is the difference between the actual cost and the flexible budget cost. Given the variance of $105,000 and an actual cost of $65,000, the flexible budget cost is derived by subtracting the variance from the actual cost, resulting in $40,000. This calculation helps in assessing cost control performance.

In variable costing, operating income is directly tied to the volume of units sold rather than the volume of units produced. Because fixed manufacturing overheads are expensed as period costs, changes in inventory levels do not distort operating income. Therefore, the contribution margin generated by the actual units sold is the primary driver of profit, making the cost-volume-profit analysis more reliable for management planning and performance evaluation.

Step costs are costs that remain constant over a specific range of activity but increase by discrete amounts when the activity level exceeds that range. These are often associated with resources that must be acquired in chunks, such as hiring an additional supervisor once a certain number of employees is reached, creating a 'stair-step' pattern in the cost behavior graph.

Actual costing is a valuation method that calculates the cost of a product or service by using the actual direct costs incurred. By multiplying the actual direct rates by the actual quantity of inputs, businesses can determine the precise historical cost of production. This method is highly accurate but may lead to fluctuations in unit costs due to variations in actual input prices and quantities over different periods.

In regression analysis, residual terms are the vertical deviations or errors that occur between the predicted values from the estimated regression line and the actual observations. These residuals help to measure the model's effectiveness in capturing the variability of the data around the line of best fit, indicating how well the model explains the underlying data.

The target rate of return on investment (ROI) is a financial performance measure used to evaluate the efficiency of an investment. By dividing the target annual operating income by the capital invested, management can determine if the project or business unit is generating sufficient returns relative to the resources deployed.

The total contribution margin is calculated by multiplying the contribution margin per unit by the total number of units sold. Multiplying $900 per unit by 70 units results in a total contribution margin of $63,000. This figure represents the total amount available to cover the company's fixed costs and contribute to net operating income.

Backflush costing is a simplified accounting method used in lean manufacturing environments. It delays the recording of costs until the production process is complete or the goods are sold. By 'flushing' costs through the system at the end, it eliminates the need for detailed tracking of work-in-process inventory, making it highly efficient for companies with short production cycles and low inventory levels.