Refer to the information in Problem 8-2A. Major Company€™s actual income statement for 2009 follows.

Required
1. Prepare a flexible budget performance report for 2009.
Analysis Component
2. Analyze and interpret both the
(a) Sales variance and
(b) Direct materialsvariance.

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MAJOR COMPANY Statement of Income from For Year Ended December 31, 2009 Sales (18,000 units) Cost of goods sold $3,948,000 Machlnery repairs (variable cost) Depreclation-plant equipment Utilities (fixe$147.500) Plant management salaries 220,000 2,25500 293.000 63,000 300,000 215,500 Gross profit. Selling expenses 1,696,500 Packaging Shipping . Sales salary (annual) ..253.000 459,000 87,500 118,500 General and administrative expenses Advertising expense. Salaries Entertalnment expense. 07,000 241,000 88,500 436,500 Income from operationsw $801,000