Baird Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for 2019 follow:

	Static Budget					Actual Results
Production in units	36,000 kits					37,500 kits
Direct materials		$	259,200				$	308,200
Direct labor			223,200					225,200
Variable manufacturing overhead			54,000					59,150
Total variable costs			536,400					592,550
Fixed manufacturing overhead			206,000					201,200
Total manufacturing cost		$	742,400				$	793,750

Required

a. Convert the static budget into a flexible budget.

b. Calculate the variances.

Convert the static budget into a flexible budget. (Do not round intermediate calculations.)

	Flexible Budget
Production in units	37,500	Kits
Direct materials
Direct labor
Variable manufacturing overhead
Total variable costs
Fixed manufacturing overhead
Total manufacturing costs

Calculate the variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

	Variances
Direct materials
Direct labor
Variable manufacturing overhead
Total variable costs
Fixed manufacturing overhead
Total manufacturing costs