Assume that in October 2019 the Schmidt Machinery Company (Exhibit 14.1) manufactured and sold 900 units for $710 each. During this month, the company incurred $387,000 total variable costs and $180,500 total fixed costs. The master (static) budget data for the month are as given in Exhibit 14.1.

Required:

1. Prepare a flexible budget for the production and sale of 900 units.

2. Compute for October 2019:

a. The sales volume variance, in terms of operating income. Indicate whether this variance was favorable (F) or unfavorable (U).

b. The sales volume variance, in terms of contribution margin. Indicate whether this variance was favorable (F) or unfavorable (U).

3. Compute for October 2019:

a. The total flexible-budget (FB) variance. Indicate whether this variance was favorable (F) or unfavorable (U).

b. The total variable cost flexible-budget variance. Indicate whether this variance was favorable (F) or unfavorable (U).

c. The total fixed cost flexible-budget (FB) variance. Indicate whether this variance was favorable (F) or unfavorable (U).

d. The selling price variance. Indicate whether this variance was favorable (F) or unfavorable (U).

Required 1 Required 2 Required 3 Prepare a flexible budget for the production and sale of 900 units. Units sold Sales 0 Required 1 Required 2 Required 1Required 2 Required 3 Compute for October 2019: a. The sales volume variance, in terms of operating income. Indicate whether this variance was favorable (F) or unfavorable b. The sales volume variance, in terms of contribution margin. Indicate whether this variance was favorable (F) or unfavorable Show less Sales Volume Variance Operating income Contribution margin K Required 1 Required 3 > Required 1 Required 2 Required 3 Compute for October 2019: a. The total flexible-budget (FB) variance. Indicate whether this variance was favorable (F) or unfavorable (U) b. The total variable cost flexible-budget variance. Indicate whether this variance was favorable (F) or unfavorable (U) c. The total fixed cost flexible-budget (FB) variance. Indicate whether this variance was favorable (F) or unfavorable (U). d. The selling price variance. Indicate whether this variance was favorable (F) or unfavorable (U). Show lessA a. The total flexible-budget (FB) variance b. The total variable cost flexible-budget variance c. The total fixed cost flexible-budget (FB) variance d. The selling price variance