Barrington Bears has developed the following sales forecasts for the next few months. January 500, February 600, March 720, April 800 and May 770. BB has 80 bears on hand on Dec. 31. Normal ending inventory policy is to hold 20% of next months sales.

Each bear needs 0.8 yards of fabric and two pounds of stuffing (raw material). Fabric is budgeted to cost $15 per yard and stuffing $4 per pound. Direct labor is paid $18 per hour. Each bear takes 40 minutes to hand-finish. Variable overhead totals $21 per direct labor hour. Fixed overhead amounts to $25,000 per month.

Given the production target of 650 bears for February, assume that the actual output for February was 630 bears and that actual production costs totaled $54,280.

Required:

a) Calculate the budgeted variable cost per unit based on the static budget.

b) How did BB perform in February relative to the flexible budget target? Calculate the amount of variance and indicated if it is unfavorable or favorable?