(3) A calculation of the bonuses for each of the three managers based on the variances calculated and incentive plan details provided earlier.

Exhibit 1 - Summary of Actuals and Master Budget Actual Master Budget Units sold (# of bears) 331,400 295,000 Revenue Retail $ 10,389,390 S 12,040,000 Wholesale 1,888,980 2,960,000 Amazon 4,546,808 Total revenue 16,825,178 15,000,000 Direct materials Actrylic pile fabric 288,403 283,873 Acrylic eyes 139,282 123,900 Plastic joints 288,035 221,250 Polyester fiber filling 534,788 427,455 Label 19,707 17,700 Designer box 66,329 76,700 Accessories 62,538 41,300 Total Materials 1,399,082 1,192,178 Direct labor 4,305,881 3,292,200 Variable manufacturing overhead 1,979,441 1,235,460 Fixed manufacutring overhead 767,228 746,940 Variable selling expenses 1,879,779 1,405,500 Fixed selling expenses 5,865,815 5,146,500 Administrative expenses 1,184,801 1,190,000 Operating profit S (556,850) $ 791,222 Note: The above actual operating income does not include the bonuses paid to management. 9Exhibit 2 - Sales by Channel Actual Units Unit Price Total Sales ($) Retail 188,898 55.00 10,389,390 Wholesale 49,710 38.00 1,888,980 Amazon 92,792 49.00 4,546,808 331,400 16,825,178 Budget Retail 215,000 56.00 12,040,000 Wholesale 80,000 37.00 2,960,000 295,000 15,000,000 10Exhibit 3 - Standard Cost Information Input Unity Input Price Standard out Dinist materials Ricintity Units Dollars Per Input Unit S per bear Actrylic pile fabric 0.02673 bahs 36 belt Acrylike eyes 2.00 Plantic joints 5.00 joints 015 joint 0.7500 Polyester fiber filling 190080 pounds 1.61 pour 1.4495 1.00 label 0.06 Label 078406 1.80 box 126 box 2.260 160 various 3.1408 Total Materials 40413 Direct labor Dollars Per Input Unit hours 9.30 hour 4.65 Cutting and stuffing hour how 2 79 Assembly hour Dressing and packaging hours hour Total Labor 13 hours hour 11.1609 Variable manuladring overhead 120 DL hours 1.4900 Di hour 4.1889 Fined manufacturing overhead 1.30 Di hour 1100 Notes: Normal expected production and sales is 295,600 units The cout of somories range depending on the arcesiory type (from $0.07 to $0:41), A standard is used to reflect all accessories given their low cost Variable and fiord overhead cout are allocated to bears bried on the mandard fired labor costs allowed. Mandarth are computed at the normal production level of 295,000 bears. Maximum capacity is 350,600 units. 11Exhibit 4 - Actual Costs Quantity Used Input Price Total Cost Direct materials Quantity Units Dollars Per Input Unit Total Actrylic pile fabric 8,345 bolts 34.5600 bol 288,403 Acrylic eyes 663,248 eyes 0.2100 eye 139,282 Plastic joints 1,937,023 joints 0.1487 joint 288,035 Polyester fiber filling 354,164 pounds 1.5100 pound 534,788 Label 328,447 labels 0.0600 label 19,707 Designer box 315,854 boxes 0.210 box 66,329 Accessories 330,190 various 0.1894 each $2,538 Total Materials 1,399,082 Direct labor Hours Units Dollars Per Input Unit Total Sewing 189,211 hours 9.59 hour 1,814,533 Cutting and stuffing 104,117 our 9.59 hou 998,482 Assembly 121,054 ours 9.59 hour ,160,908 Dressing and packaging 34,615 hours 9.59 hour 331,958 Total Labor 448,997 hours 9.59 hour 4,305,881 Variable manufacturing overhead 1,979,441 Fixed manufacturing overhead 767,228 12Exhibit 5 - Selling Expenses Actual Budget Units Sold (# of bears) 331,400 295,000 Variable Selling Expenses ($) Packing and shipping S 1,589,900 S 1,080,214 Commissions 125,789 249,330 Marketing materials 164,090 75,956 Total variable selling exp $ 1,879,779 S 1,405,500 Fixed Selling Expenses ($) Salaries 3,274,871 2,705,999 Advertising and promotion 2,590,944 2,440,501 Total fixed selling exp 5,865,815 S 5,146,500 13