1.	Prepare a flexible budget based on the actual number of recliners sold.
2.	Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Round to the nearest dollar.
3.	Have White's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why?
4.	Describe how White's managers can benefit from the standard costing system.

		Static Budget (1,000 recliners)	Actual Results (980 recliners)
Sales	(1,000 recliners x $510 each)	$510,000
	(980 recliners x $495 each)		$485,100
Variable Manufacturing Costs:
Direct Materials	(6,000 yds. @ $8.60 / yd.)	51,600
	(6,143 yds. @ $8.40 / yd.)		51,601
Direct Labor	(10,000 DLHr @ $11.30 / DLHr)	113,000
	(9,600 DLHr @ $11.50 / DLHr)		110,400
Variable Overhead	(6,000 yds. @ $5.00 / yd.)	30,000
	(6,143 yds. @ $6.40 / yd.)		39,315
Fixed Manufacturing Costs:
Fixed Overhead		60,000	62,000
Total Cost of Goods Sold		254,600	263,316
Gross Profit		$255,400	$221,784

White Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. White allocates overhead based on yards of direct materials. The company's performance report includes the following selected da (Click the icon to view the selected data.) Read the requirements Requirement 1. Prepare a flexible budget based on the actual number of recliners sold. (Round budget amounts per unit to the nearest cent.) White Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue Variable Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold Gross Profit