CALCULATOR PRINTER VERSION BACK NEXT Pressure Reducers, Inc. produces and sells lumbar support cushions for office chairs using a special foam that molds to a person's back. Since al products are made to order, the only inventory the company maintains is raw materials. Thus, all costs of production are recognized in the period in which they are incurred. The following anal performance report was prepared from the company's accounting records Actual Units sold 14,500 Sales revenue $2,972,500 Cost of goods sold 2.051.000 Gross margin 921,500 Seling and administrative expenses W e expenses Z625 Operating income $632,875 Budget 15.000 $3,000,000 2.075,000 925,000 Variance 500 Unfavorable $27.500 Unfavorable 24,000 Favorable 3,500 Unfavorable 1,375 Favorable $2,125 Unfavorable 290,000 635,000 The following foued costs are induced in these amounts Cost of goods sold Selling and administrative expenses Actual $195,000 140,000 Budget $200,000 140,000 e wonder why the Hank Martinez, Pressure Reducers' CFO, used the folowing standard cost card in preparing the budget and thought he had doneo od obemang production and w variable cost of old deviated from that budget Standard Quantity per Unit Standard Price Direct material 10 yards $5 per yard Direct labor hours 8 per DH Varie overhead Shes 57 DH Total Cost per Unit 550 Actual variable costs incurred during the year were as follows. Direct materiais purchased and used (133.400 yards Direct labor u m . DUH $7.80) Vart overhead costs incurred $5.25) $700.350 622.00 533600 SO Show that the sum of direct materials, direct labor, and variable overhead variances equals the flexible budget variance for variable cost of goods sold in part (a), (Ir variance is zero, select "Not Applicable and enter for the amounts.) Direct materials variance Direct labor variance Variable overhead variance Total Click if you would like to show Work for this questions Open Show Wack