Burt's Bees, owned by the Clorox Company, manufacturers a number of skin products. Assume that the company compiled the following budgeted manufacturing cost information for a line of lip balm.

Budgeted Costs

REQUIRED

a$.$ Prepare a variance analysis.

Note: Do not use negative signs with your answers.

b$.$ Analyze the activity variances and the flexible budget variances.

Activity variances:

The activity variance shows a

result simply due to

$$ cases but produced $9,500$

$$

cases. This means that costs were

volume than budgeted. The company budgeted production of

on lower hat$()vv$ production volume.

Flexible budget variances:

The flexible budget variance was

by

$.$ This was due to costs for direct materials and variable overhead which were

$,$ budget. Direct labor and fixed overhead costs were

under $$

under ${}^{}$

budget but not enough to offset the manufacturing costs that were

over

budget.

Overall, the variance was

by $

$,$ made up of a

favorable

offset by an $$25,500$

flexible budget variance. This means that costs were down due to lower volumes, but at an activity level of $9,500$ units, costs

should have been $

The overall unfavorable $$

variance of $$28,500$

$28,500$

$x$

should be investigated.