1) Saras Systems manufactures audio systems for cars. Two models are produced: The Standard model has a budgeted price of $230 and a standard variable cost of $110. The Blaster model has a budgeted price of $510 and a standard variable cost of $190. At the beginning of the year, Sara estimated that she would sell 6,120 Blaster models and 24,480 Standard models. The actual results for the year showed that 7,090 Blaster models were sold for total revenues of $2,977,800. A total of 25,600 Standard models were sold for revenues of $5,632,000.

Compute the volume variance Compute the mix

quantity variances for the year.

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Start Me Up, Inc., manufacturers a caffeinated energy drink that sells for $4 each. The results for its first year of operations appear in the table below.

number of drink produced ----------52000

number of drink sold-------------50000

direct materials per drink-----------$0.55

direct labor per drink --------------0.25

variable manufacuring overhead per drink 0.15

total fixed manufacuring overhead----------39000

total fixed selling and administrative costs ----50000

Compute the income for the first year under absorption costing. Compute the income for the first year under variable costing.