Archers cost accountant prepared the following static budget based on expected activity of 4,000 units for the May 2020 accounting period:

Sales Revenue $64,000

Variable Costs 34,000

Contribution Margin $30,000

Fixed Costs 20,000

Net Income $10,000

a. If Archers sales manager were to prepare a flexible budget for expected activity of 4,300 units, budgeted net income on this flexible budget would be?

Sales Revenue (64000*4300/4000) $68800

Variable Costs (34000*4300/4000) 36550

Contribution Margin $32250

Fixed Costs 20000

Net Income $12250

b. If Archer actually produced and sold 4,300 units at $20 each, what is the sales revenue activity/volume variance?

c. If Archer actually incurred the following costs during May 2020:

Sales Revenue $86,000

Variable Costs 37,000

Contribution Margin $49,000

Fixed Costs 22,000

Net Income $27,000

The flexible budget variance for:

i. Fixed costs:__________________________

ii. Variable costs:_________________________

Indicate favorable / unfavorable variances for full credit