Budgeting Selling Price is $3.65

1). What are the static budget, sales volume, and flexible budget variances for direct materials? Which of these variances will be the most informative and why?

Revenue Direct Materials Direct Labor Applied MOH Gross Profit Static Budget Flexible Budget Actual Results $ 456,250 $ 134,850.00 $ 591,100 $ 183,750 $ 90,173.00 $ 273,923 $ 30,625 $ 13,625.00 $ 44,250 $ 36,750 $ 8,350.00 $ 45,100 $ 205,125 $ 22,702 $ 227,827 $ Total Notes: In this division we had no beginning or ending inventorys of direct materials or finished goods. Manufacturing overhead is a fixed expense. Actual Units Sold: 150,000 $200,000 in gross margin from the new low sodium chip line sold 20% more chips than expected and only increased the margin by 14% the margin! Actual DM and DL Costs Direct Materials Bags Potatoes Sea Salt (dashes) Oil (Gallons) Labels Packaging Boxes Quantity Used 155,000 825,000 900,150 25,000 175,000 7,726 $ $ $ $ Total Cost 15,350 175,100 18,003 49,580 13,000 2,890 $ $ Direct Labor Apprentice Chip Maker Chip Master Hours Worked 1,550 900 $ $ $ Total Cost 18,200 14,950 11,100 555 Budgeted DM and DL Costs (Standards) Estimated Qty per Bag 1 5 Direct Materials Bags Potatoes Sea Salt (dashes) Oil (Gallons) Labels Packaging Boxes $ $ $ $ Cost per DM unit 0.10 0.19 0.02 1.92 6 1/8 0.04 1 1/20 $ $ 0.40 Estimated hours per batch 0.15 Rate per hour 10.00 Direct Labor Apprentice Chip Maker Chip Master 0.12 0.08 $ $ $ 15.00 20.00 The budgeted selling price was $3.5. Bags are made in batches of 20. Revenue Direct Materials Direct Labor Applied MOH Gross Profit Static Budget Flexible Budget Actual Results $ 456,250 $ 134,850.00 $ 591,100 $ 183,750 $ 90,173.00 $ 273,923 $ 30,625 $ 13,625.00 $ 44,250 $ 36,750 $ 8,350.00 $ 45,100 $ 205,125 $ 22,702 $ 227,827 $ Total Notes: In this division we had no beginning or ending inventorys of direct materials or finished goods. Manufacturing overhead is a fixed expense. Actual Units Sold: 150,000 $200,000 in gross margin from the new low sodium chip line sold 20% more chips than expected and only increased the margin by 14% the margin! Actual DM and DL Costs Direct Materials Bags Potatoes Sea Salt (dashes) Oil (Gallons) Labels Packaging Boxes Quantity Used 155,000 825,000 900,150 25,000 175,000 7,726 $ $ $ $ Total Cost 15,350 175,100 18,003 49,580 13,000 2,890 $ $ Direct Labor Apprentice Chip Maker Chip Master Hours Worked 1,550 900 $ $ $ Total Cost 18,200 14,950 11,100 555 Budgeted DM and DL Costs (Standards) Estimated Qty per Bag 1 5 Direct Materials Bags Potatoes Sea Salt (dashes) Oil (Gallons) Labels Packaging Boxes $ $ $ $ Cost per DM unit 0.10 0.19 0.02 1.92 6 1/8 0.04 1 1/20 $ $ 0.40 Estimated hours per batch 0.15 Rate per hour 10.00 Direct Labor Apprentice Chip Maker Chip Master 0.12 0.08 $ $ $ 15.00 20.00 The budgeted selling price was $3.5. Bags are made in batches of 20