A business makes a standard product which is budgeted to sell at $10.00 a unit. It is made by taking a budgeted 1 kg of material, budgeted cost of $4.00 a kilogram and working on it by hand by an employee, paid a budgeted $10.00 an hour, for a budgeted 12 minutes. Monthly fixed overheads are budgeted at $13,000.00. The output for August was budgeted at 6000 units.

The actual results for March are as follows:

Sales revenue (5400 units) $ 58,000.00

Materials (5300 kg) $ 22,525.00

Labour (950 hours) $ 12,500.00

Fixed overheads $ 14,000.00

Required:

1. Flex the budget
2. analyse the variance

discuss your findings