CHAPTER 6 HANDOUT - VARIANCE ANALYSIS Alex is the controller of Joos Industries. After careful review of the budgeted income statements, and after discussions with the sales and production managers, Alex determined that the best alternative is to base the master budget on a sales volume of 45,000 units and a sales price of $45 per unit. At the end of the year, the company had the following income statement, which was based on 41,000 actual units. Requirement A: Complete the Flexible Budget in the table below and identify if the flexible budget variance is favorable or unfavorable. Requirement B: The direct materials purchased ware $200 per unit while the standard price for direct materials is $180. The total direct material used was 1,000 units while the standard direct materials allowed for actual production is 980 units, 1) identify if the variances below will be favorable or unfavorable and 2) what might be a cause for these variances