3. (only question 3 please) using the master budget data, create a flexible budget and calculate the flexible budget variances.

if you dont mind answering question 4 as well please

CM . Variance 4,000 5178,000 U F $22.500 42.000 13200 F F F 200 300 1200 F F Exhibit 1. Performance Report, May, 2015 Master Budget Actual Results 14.000 18,000 Unit Volume $686.000 $854.000 Sales Revenue Variable Mig Costs DM $100,000 $ 85,400 DL 288,000 245,000 Indirect labor 57,600 44,400 idle time 14,400 14,200 Cleanup time 10.800 10,000 Misc. Supplies 5.200 4,000 Total Var. Mfg. Costs 5484,000 $404,000 Variable Shipping Costs $28.800 $28.000 Total Variable costs $512,800 432.000 Contribution Margin $351,200 $254.000 Fixed Mfg. Costs Supervision $57,600 58.800 Rent 20,000 20,000 Depreciation 60,000 60,000 Other 10400 19.400 Total Fixed Mfg. Costs $148,000 149,200 SGRA 112.000 112.000 Total Fixed Costs $260.000 261.200 $80,000 3809 F S80 800 F 597,200 U $1.200 $1,200 U $1.200 U Net Operating Income 91.200 (57:2001 1598.4093 U TO: Eleanor Brooks, Glenwood Controller FROM: Tom Gordon, Plant Accountant DATE: June 3, 11:00 PM As promised, here is the May Performance Report. (I told you smaller is better; weshow Roberts how efficient our plant accounting department is!) I am sure you'll find the bottom lineas disappointing as did, but plant performance really looks good and the crews there may deserve our compliments. Note how they are at or under budget on every single cost item except for supervision. I suspect that the unfavorable variance in supervision was caused directly by the work involved in controlling other costs Because I worked late, I won't be in the office tomorrow. The other data that you requested areas follows: 1. There was no beginning or ending inventories in work in progress or finished goods 2. Per unit standard costs used in budgeting this year were: Direct materials $6 Diret labor 16 3. We are still using 2 hours per unit as standard labor time. 4. Actual material prices have been 56 lets than expected. 5. Actual direct labor.couts have been $8.20 per hour due to the increase in medical benefits granted last January The May Performance Report is shown in Exhibit 1. Questions 1. Using master budget data, how many controls would have to be sold for Glenwood Controls Division to break even? 2. Compare the break even volume to current volume. Why is Glenwood losing money in May? What are possible explanations? 3. Using the master budget data, create a flexible budget and calculate the flexible budget variances 4. Which variances, if any, should be brought to management's attention? Create a standard cost card and a corresponding actual results table for May. Hint: Derive the actual quantity value by dividing actual cost by actual price & Using the information in #5, break down the direct material and direct labor flexible budget variances into price and quantity variances. 2 What's the story here? What recommendations would you make to Glenwood Controls Division to improve their future performance? TO FROM DATE Glenwood Controls Division When Eleanor Brooks arrived at her office at Glenwood Controls Division on June 1, 2015, she was pleased to find the monthly performance report for May on her desk. Glenwood Controls Division was a wholly owned subsidiary of Roberts Corporation. As division controller, her job was to analyze results of operations each month and issue a report to both Glenwood's senior management team and to Roberts corporate headquarters. The atmosphere at Glenwood had been tense throughout the month of May, so Brooks' review would provide important information on how well division management had compensated for the recent loss of a major customer contract. The Current Situation As pre efficie did, how unta Bec folle Glenwood Controls manufactured a single mechanical control device sold to household and commercial appliance manufacturers, Glenwood Controls was a family-owned business that had been acquired in tate 2014 by Roberts Corporation. After the acquisition, few changes had been made in Glenwood's operating procedures or systems; however, recently Roberts had decided to move some bey managers to Glenwood to increase communication and synergy between the division and corporate headquarters. in April 2015, Eleanor Brooks, who had received her MBA in 2013, was transferred from corporate headquarters to Glenwood; she was joined soon thereafter by Daniel Haskell, also from Roberts, who joined Glenwood as the new division manager Because of the lost contract, Brooks asked the plant accountant to assemble the May figures as quickly as possible. She was amazed that the report was ready so soon. At headquarters, monthly results had rarely been available until several days after the end of each month. Even though the plant accountant had promised Brooks that he would be able to prepare the report in a single day with some overtime work, she was surprised that he had been able to do so. Glenwood had prepared a budget for 2015 based on estimated sales and production costs. Because sales were not subject to seasonable fluctuations, the monthly budget was merely one-twelfth of the annual budget. No adjustments were made to the May budget when the contract was lost in April The Performance Report A glance at the performance report confirmed Brooks' worst fears. Instead of a budgeted profit of $93,200, Glenwood had lost $7.200 in May. Even allowing for the lost volume, she had expected a better showing. The plant accountant had attached the following memo to the report