Check my work Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 126,000 liters at a budgeted price of $270 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials (2 pounds $17) (0.5 hours $50) $34 Direct labor 25 Variable overhead is applied based on direct labor hours. The variable overhead rate is $150 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $75 per unit. All non-manufacturing costs are fixed and are budgeted at $2.5 million for the coming year At the end of the year, the costs analyst reported that the sales activity variance for the year was $816,000 unfavorable. The following is the actual income statement (in thousands of dollars) for the year. Sales revenue $32,718 Less variable costs Direct materials 3,508 1,140 Direct labor 1,060 5,708 $27,010 Variable overhead Total variable costs Contribution margin Less fixed costs Fixed manufacturing overhead Non-manufacturing costs Total fixed costs 1,180 1,360 2,540 $24,470 Operating profit Required: Prepare a profit variance analysis. (Enter your answers in thousands of dollars. Indicate the effect of each variance by selecting "F" Required: Prepare a profit variance analysis. (Enter your answers in thousands of dollars. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) PAYNESVILLE CORPORATION Profit Variance Analysis Non-Manufacturing Variances Sales Price Variance Sales Activity Variance Manufacturing Variances Flexible Master Actual Budget Budget Sales revenue $ 32,718 Materials 3,508 Direct labor Variable overhead Total variable costs 1,140 1,060 5,708 0 0 Contribution margin Fixed costs: 00 27,010 $ $ 0 Manufacturing 1,180 Non-manufacturing Total fixed costs 1,360 $ 2,540 0 0 Operating profits 24,470 $ 0