1 Exercise 16-34 (Algo) Flexible Budget (LO 16-2) 5 points Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 110,000 liters at a budgeted price of $150 per liter this year. The standard direct cost sheet for one liter of the preservative follows Direct materials Direct labor (2 pounds $9) 518 (0.5 hours $34) 17 Variable overhead is applied based on direct labor hours. The variable overhead rate is $70 per direct labor hour. The fixed overhead Tate at the master budget level of activity is 535 per unit. All non-manufacturing costs are fixed and are budgeted at $1.7 million for the coming year At the end of the year, the costs analyst reported that the sales activity variance for the year was $480,000 unfavorable Required Prepare a flexible budget for Paynesville for the year (Enter your answers in thousands of dollars.) Answer is complete but not entirely correct. PAYNESVILLE CORPORATION Flexit Budget thousands of dollars) Sales Tevenue $ 158383 Variable costs Maten 1733 Direct labor 1.750 Variable overhead 3.430 000 1 Variable overhead is applied based on direct labor hours. The variable overhead rotes 570 per direct labor hout the fored overhead rate at the master budget level of activity $35 per unit All non manufacturing costs are fixed and are budgeted at $1 million for the coming year At the end of the year, the costs analyst reported that the sales activity variance for the year we $480.000 unfavorable Required Prepare a flexible budget for Paynesville for the year. (Enter your answers in thousands of dollars) 5 Answer is complete but not entirely correct PAYNESVILLE CORPORATION * 15.338 housands of Serve Varico Mama Duet labor Vars Overhead OOO 7500 1700 2.400 OOO 5 Canon mag Free coche 00 1300 Ni-man 200 Oro