Drifblim Fine Furniture Inc manufactures house decors. Brass sculptures are its best seller. The normal selling price of a piece of sculpture is 3,000.

Drifblim has total assets amounting to 2,500,000 and liabilities of 1,500,000.

Cost structure of the firm:

Fixed Costs: producing and marketing their pieces brass of sculptures is 500,000

Variable costs per unit are the manufacturing costs (materials, labor and overhead) and marketing costs of 400

Production data: After careful study of the production processes, it was determined that manufacturing overhead was closely related to material usage. Thus manufacturing overhead to production is allocated based on pounds of materials used.

As a management accountant and business analyst for Drifblim, the undertakings are as follows:

A. Variance Analysis. Ascertain whether each is favorable (F) or unfavorable (U) and recommendations for improvement.

(1) Materials Price Variance _________________

(2) Raw Materials Inventory _________________

(3) Materials Quantity/ Usage Variance _________________

(4) Labor Rate Variance _________________

(5) Labor Efficiency Variance _________________

(6) Variable MOH Rate Variance _________________

(7) Variable MOH Efficiency Variance: _________________

B. Cost-Volume-Profit Analysis:

(8) How much is the contribution margin percentage? _________________

(9) How many units must be sold to break even? _________________

(10) How many units must be sold earn a profit of 2 million? _________________

(11) If 1,500 units are sold, how much is the margin of safety? _____________; _______%;_____________ units

(12) If 500 units are sold, what is the degree of operating leverage?(round-off to 2 decimal places)? _________________

(13) If 500 units are sold, what is the ROI? _______%

(14) If the target contribution margin percentage is 80%, what should be the selling price? _________________

The following are the production standards