A new accounting intern at Gibson Corporation lost the only copy of this period's master budget. The CFO wants to evaluate performance for this period but needs the master budget to do so. Actual results for the period follow. Sales volume 130,000 units Sales revenue $ 728,000 Variable costs Manufacturing 160,160 Marketing and administrative 65,520 Contribution margin $ 502,320 Fixed costs Manufacturing 221,000 Marketing and administrative 115,800 Operating profit $ 165,520 The company planned to produce and sell 117,000 units for $5.00 each. At that volume, the contribution margin would have been $409,500. Variable marketing and administrative costs are budgeted at 10 percent of sales revenue. Manufacturing fixed costs are estimated at $2.00 per unit at the normal volume of 117,000 units. Management notes, "We budget an operating profit of $1.00 per unit at the normal volume."

Required: a. Construct the master budget for the period. b. Prepare a profit variance analysis.

Construct the master budget for the period. (Do not round intermediate calculations.)

GIBSON CORPORATION
Master Budget
Sales volume		units
Sales revenue
Variable costs:
Manufacturing
Marketing and administrative
Contribution margin	$0
Fixed costs:
Manufacturing
Marketing and administrative
Operating profit	$0

Prepare a profit variance analysis. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

GIBSON CORPORATION
Profit Variance Analysis
	Actual	Manufacturing Variances		Marketing and Administrative Variances		Sales Price Variance		Flexible Budget	Sales Activity Variance		Master Budget
Sales revenue	$728,000
Variable costs:
Manufacturing	160,160
Marketing and administrative	65,520
Contribution margin	$502,320
Fixed costs:
Manufacturing	221,000
Marketing and administrative	115,800
Operating profit	$165,520