Coca-Cola Company provides the following budgeted and actual data for producing 30,000 units:
•Budgeted: Direct materials $600,000, Direct labor $450,000, Variable overhead $300,000, Fixed overhead $360,000
•Actual: Direct materials $620,000, Direct labor $470,000, Variable overhead $320,000, Fixed overhead $370,000
Required:
1.Prepare a flexible budget for 30,000 units.
2.Calculate the variances for direct materials, direct labor, variable overhead, and fixed overhead.
3.Provide possible reasons for the variances.