#3: Prepare three budgets. A Planning Budget at 1000 units. A Flexible Budget at 1100 units. An Actual Results Budget at 1100 units. Prepare a Variance Analysis by comparing the Flexible Budget to the Actual Results Budget. Homework Problem #4: Showing the formulas, calculate the following variances: a) Materials Quantity Variance b) Materials Price Variance c) Labor Rate Variance d) Labor Efficiency Variance e) Variable overhead Rate Variance f) Variable Overhead Efficiency Variance. Make or Buy Decision: Ashley Bicycle Parts makes sets of pedals for 10-speed bikes. The company has the following costs per unit for each of the set of pedals: Direct materials $10 Direct labor 4 Variable overhead 1 Supervisor's salary 3 Allocated overhead 5 Direct materials $10 Direct labor Variable overhead 1 Supervisor's salary 3 Allocated overhead 5 Total cost per unit $23 An outside supplier has offered to sell 10,000 units (set of pedals) to Ashley Bicycles for $200,000. The Supervisor's Salary is avoidable; that is, the supervisor will not be needed if the parts are purchased from the outside supplier. The Allocated overhead is unavoidable; that is, the company will have the overhead costs regardless of whether it makes or buys the parts. Homework Problem #5: Should the company make or buy the parts? Prepare a Make/Buy differential analysis to show if the company should continue to make in-house or buy from the outside supplier