Assume Piedmont Computer Company has created a standard cost card for the PCC model tablet computer, with overhead allocated based on direct labor hours:

NEED (REQUIREMENT 2)

Direct Materials	$300 per tablet
Direct Labor	3 hours per tablet @ $26 per hour
Variable Overhead	3 hours per tablet @ $5 per hour
Fixed Overhead	$54,000 per month

During the month of September, Piedmont Computer Company incurred the following costs while manufacturing 1,100 PCC model tablets:

Requirements:

1.	Prepare a flexible budget for September for 900, 1,000, and 1,100 PCC model tablets. The tablet has a standard sales price of $675. List variable costs separately.
2.	Using 1,000 PCC model tablets for the static budget, prepare a flexible budget performance report for September. Total sales revenue for the month was $767,800. The company sold 1,100 tablets.
3.	What insights can the management of Piedmont Computer Company draw from the performance report?

Note: This is the layout for the first requirement

Piedmont Computer Company
Flexible Budget
For the Month Ended September 30
	Budget Amount per Unit
Units		900	1,000	1,100
Sales Revenue	675	607500	675000	742500
Variable Costs:
Direct Materials	300	270000	300000	330000
Direct Labor	78	70200	78000	85800
Variable Overhead	15	13500	15000	16500
Total Variable Costs		353700	393000	432300
Contribution Margin		253800	282000	310200
Fixed Costs		54000	54000	54000
Operating Income		199800	228000	256200

Requirement 2:

	Budget		Flexible			Sales
	Amounts	Actual	Budget		Flexible	Volume		Static
	Per Unit	Results	Variance	F or U	Budget	Variance	F or U	Budget
Units
Sales Revenue
Variable Costs:
Direct Materials
Direct Labor
Variable Overhead
Total Variable Costs
Contribution Margin
Fixed Costs
Operating Income