Cortez Manufacturing, Inc. has the following flexible budget formulas and amounts:
Sales..................................................................... $ 25 per unit
Direct materials..................................................... 5 per unit
Direct labor........................................................... 3 per unit
Variable factory overhead.................................... 4 per unit
Variable selling and administrative expense ....... 1 per unit
Fixed factory overhead........................................ $25,000 per month
Fixed selling and administrative expense .......... $20,000 per month
Actual results for May for the production and sale of 5,000 units were as follows:
Sales.................................................................... $120,000
Direct materials.................................................... 26,000
Direct labor......................................................... 14,000
Variable factory overhead................................... 25,500
Variable selling and administrative expense....... 5,500
Fixed factory overhead...................................... 26,750
Fixed selling and administrative expense............... 19,800
Prepare a performance report for May that includes the identification of the favorable and unfavorable variances.