Comprehensive review of Chapters 7 and 8, flexible budget. The Monthly Herald budgets to produce 300,000 copies of its monthly newspaper for August 2010. It is budgeted to run 15,000,000 print pages in August with 50 print pages per newspaper. Actual production in August 2010 was 320,000 copies with 17,280,000 print pages run. Each paper was only 50 print pages, but quality problems with paper led to many pages being unusable. Variable costs comprise direct materials, direct labour, and variable indirect costs. Variable and fixed indirect costs are allocated to each copy on the basis of print pages. The driver for all variable costs is the number of print pages. Data pertaining to August 2010 are as follows:

Data pertaining to revenues for The Monthly Herald in August 2010 are:

The Monthly Herald sells for $0.60 per copy in 2010. No change from this budgeted price of $0.60 per copy occurred in August 2010. The actual direct labour rate in August 2010 was $34.80 per hour. Actual and budgeted pages produced per direct labour-hour in August 2010 was 10,000 print pages. Copies produced but not sold have no value. Advertising revenue covers payments from all advertising sources.
REQUIRED 1. Prepare a comprehensive set of variances for each of the four categories of cost of The Monthly Herald.
2. Comment on the results in requirement 1. What extra insights are available with a flexiblebudget analysis over that of a static-budget analysis?LO1

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Budgeted Actual Direct materials $216,000 $269,568 Direct labour costs 54,000 60,134 Variable indirect costs 72,000 76,723 Fixed indirect costs 108,000 116,400