1. M&M Company decided to prepare a flexible budget using the following data:

a) Sales price-$50 per unit

b) Direct Materials -$10 per unit

c) Direct labor-$20 per unit

d) Variable Overhead-$5 per unit

e) Fixed Overhead $100,000

Prepare a flexible budget using the numbers listed above for 20,000, 30,000, and 40,000 units. Make sure your budget includes Contribution margin and Net Income.

2. M&M Company sold 30,000 units. Here are their actual numbers. Determine how much each actual number differs from the numbers budgeted for sales of 30000. Indicate whether the difference is favorable or unfavorable.

1. Sales $1,500,000
2. Direct Materials -$600,000
3. Direct Labor-$450,000
4. Variable Overhead-$140000
5. Fixed Overhead -$105,000