Assume that the first six months of 2021 have passed, and the Board requested that their accountant prepare an income statement for the first six months of 2021 showing how actual performance compared to budgeted data. Assume the analysis presented in Exhibit 2 was provided to the Board by the accountant. Hanson incurs fixed costs uniformly throughout the year. EXHIBIT 2 BUDGET ANALYSIS FOR THE FIRST SIX MONTHS ENDED JUNE 30, 2021 Budget Actual Variance Sales units 445,000 460,000 Sales $ 1,824,500 $ 1,863,000 $38,500 Variable costs $ 694,200 $ 690,000 $ 4,200 Contribution margin $ 1,130,300 $ 1,173,000 $42,700 Fixed costs (6 months) $ 1,052,960 $ 1,051,600 $ 1,360 Net Income $ 77,340 $ 121,400 $44,060

3.A. Total actual net income is substantially higher than budgeted net income. Based on the information provided, analyze the operations for the six months ended June 30, 2021, explaining in detail the causes of the difference between budgeted and actual net income. Every significant factor should be included in your analysis. 3.B. A Board member observed that a profit of $121,400 for half of the year would mean an annual profit of $121,400*2 or $242,800. Assuming Hanson can attain but not exceed the target volume of 890,000 units, and that revenue and cost forecasts for all of 2021 should be based on the actual experience during the first half of 2021, prepare a detailed response to a Board member who wants to know if the Board should feel satisfied