b$.$ Analyze the activity variances and the flexible budget variances.REQUIRED

a$.$ Prepare a variance analysis.

Note: Do not use negative signs with your answers.

b$.$ Analyze the activity variances and the flexible budget variances.

Activity variances:

The activity variance shows a

result simply due to

volume than budgeted. The company budgeted production of

:ases but produced

$0$

cases. This means that costs were

variable costs based on

production volume.

Flexible budget variances:

The flexible budget variance was

by:

This was due to costs for direct materials and variable overhead which were

budget. Direct labor and fixed overhead costs were

budget but not enough to offset the manufacturing costs that were

budget.

Overall, the variance was

by $$0$

$,$ made up of a

activity variance of $$,$ offset by an $$0$

overal

variance of $

should be investigated.

flexible budget variance. This means that costs were down due to lower volumes, but at an activity level of $9,500$ units, costs should have been $

The