Berwin Inc. is a small industrial equipment manufacturer with approximately $3.5 million in annual sales. Berwin can always compete with other small appliance manufacturers. However, the market expands only when there is product innovation. The following is information on Berwin Inc's performance report:

Required:

1. Compute and analyze if the variance is favorable or unfavorable! (10 points)

2. Identify the strengths and weaknesses of the performance report and give your explanation! (10 points)

3. How should the report be revised to eliminate these weaknesses? Please explain! (5 points)

Berwin Inc. Machinery Department Performance Report For The Year Ended May 31, 2019 Budget Actual Variance 3,000 3,185 Volume in unit Variable manufacturing costs: Direct materials Direct Labor Variable Overhead Total variable costs 24,843 $ $ $ $ 24,000 $ 27,750 $ 33,300 $ 85,050 $ 29,302 35,035 89,180 Fixed manufacturing costs: Indirect Labor Depreciation Tax Insurance Others Total fixed costs $ $ $ $ $ $ 3,300 $ 1,500 $ 300 $ 240 $ 930 $ 6,270 $ 3,334 1,500 300 240 1,027 6,401 $ Company Costs: Research and development Selling and administrative Total company costs Total costs $ $ $ 2,400 $ 3,600 $ 6,000 $ 97,320 $ 3,728 4,075 7,803 103,384