7-23 Flexible-budget preparation and analysis. Dartford Enterprises Ltd manufactures just one product line of scientific calculators for engineers. The current standard cost of one unit of the product is as follows:

Selling price		10.50
Direct labor (15 minutes)	2.30
Direct materials (2 meters)	1.50	3.80
Contribution		6.70
Fixed costs (based on the budgeted monthly output of 20,000 units)		3.30
Operating income		3.40

During last month, due to an unexpected fall in demand for the product, only 15,000 units were made and sold.

The actual results for last month were as follows:

Sales revenue		153,900
Less: Direct labor (4,000 hours)	35,040
Direct materials (32,000 meters)	23,360	58,400
Contribution		95,500
Fixed costs		67,350
Operating income		28,150
	Required

1. 1.Prepare a static-budget-based variance analysis of last months performance.

2. 2.Prepare a flexible-budget-based variance analysis of last months performance.

3. 3.Which department manager(s) contributed the most to the success or failure of the budget during the month? Explain your answer.