Bob has prepared the following flexible budget for . F = favorable variance, U = unfavorable variance.

Flexible Variances

Budget Price Efficiency

Material A $40,000 $1,000F $3,000U

Material B 60,000 500U 1,500F

Direct manufacturing labor 80,000 500U 2,500F

The most likely explanation of the above variances for Material A is that ________.

A) a lower price than expected was paid for Material A

B) higher-quality raw materials were used than were planned

C) the company used a higher-priced supplier

D) Material A used during September was $2,000 less than expected

12)The actual amount spent for Material B was ________.

13)The actual amount spent for DL was ________.

Beta is approached by a customer to fulfill a one-time-only special order. Beta has excess capacity. The following per unit data apply for sales to regular customers:

Variable costs:

Direct materials $120

Direct labor 60

Manufacturing support 105

Marketing costs 45

Fixed costs:

Manufacturing support 135

Marketing costs 45

Total costs 510

Markup (50%) 255

Targeted selling price $765

15) What is the full cost of the product per unit?

16) What is the contribution margin per unit?

17) For Beta, at what price per unit of this special order would operating income be the same whether or not it accepted the special order?

18) What is the change in operating income for Beta if the one-time-only special order for 1,000 units is accepted for $540 a unit?