Determine the company's standard cost for one unit Prepare a flexible Budget based on the actual number of PCs sold Compute the price variance for direct materials and for direct labor Compute the efficiency variances for direct materials and direct labor Have Gray System's managers done a goood job or a poor job controlling material and labor costs? Why? Describe how Gray System's managers can benefit from the standard costing system

Static Budget 20500 PCs Sales (20,500PCs * $ 415) (22,500PCs * $ 435) Variable manufacturing expenses: Direct Materials (205,000 parts* $9.50) Direct Materials (218,500 parts* $9.50) Direct Labor 41,000 Hrs * $14.00 Direct Labor 43,500 Hrs * $14.60 Variable Overhead (205,000 parts * $3.90) Variable Overhead (218,500 parts * $4.00) Fixed Manufacturing Costs: Fixed Overhead Total cost of goods sold Gross profit Actual Results 22500 PCs $8,507,500.00 $9,787,500.00 $1,947,500.00 $2,032,050.00 $574,000.00 $635,100.00 $799,500.00 $874,000.00 $902,000.00 $4,223,000.00 $4,284,500.00 $932,000.00 $4,473,150.00 $5,314,350.00 Requirements : Determine the company's standard cost for one unit Prepare a flexible Budget based on the actual number of PCs sold Compute the price variance for direct materials and for direct labor Compute the efficiency variances for direct materials and direct labor Have Gray System's managers done a goood job or a poor job controlling material and labor costs? Why? Describe how Gray System's managers can benefit from the standard costing system