Comprehensive Problem (Algo) LO 8-1, 8-2, 8-3,8-4, 8-5, 8-6 The management of Jordan Modems, Inc. (JMI) is uncertain as to the volume of sales that will exist in Year 1. The president of the company asked the chief accountant to prepare flexible budget income statements assuming that sales activity amounts to 3,000 and 7,000 units. The static budget is shown in the following form. Required a. Complete the following worksheet to prepare the appropriate flexible budgets. b. Calculate and show the flexible budget variances for the static budget versus the flexible budget at 7,000 units. c. Indicate whether each variance is favorable (F) or unfavorable (U). (Select "None" If there is no effect (l.e., zero varlance).) Number of units Sales revenue Variable manufacturing costs: Materials JORDAN MODEMS, INC. Flexible Budget Income Statements Cost per unit Static Budget Flexible Budgets Volume Variance 5,000 3,000 7,000 $ 150 $750,000 45 225,000 Labor 30 150,000 Overhead 7 35,000 Variable selling, general & administrative 9 45,000 Contribution margin 295,000 Fixed costs: Manufacturing rent Depreciation on manufacturing equipment Selling, general & administrative expenses Depreciation on administrative equipment Net income (loss) 59,000 69.000 85,900 21,000 $ 60,100 $(57,900) $178.100