Edison Electronics produces wireless headphones. Management planned to make and sell 9,000 sets of headphones during the year and determined the standard price and cost data to be as follows:

Standard price and variable costs
Sales	$130.00 per unit
Raw Materials	$32.20 per unit
Direct Labor	$40.50 per unit
Overhead	$18.70 per unit
Planned fixed costs
Manufacturing overhead	$97,000
Selling, general and administrative costs	$135,000

Edison Electronics actually produced and sold 9,700 sets of headphones for the year. Actual sales and costs for the year were as follows:

Sales	$1,240,300
Variable costs
Raw Materials	$325,600
Direct Labor	$400,500
Overhead	$176,400
Fixed costs
Manufacturing overhead	$100,500
Selling, general and administrative costs	$131,800

Required:

1. Prepare the static budgeted income statement showing the sales and each cost line as a separate line item in the income statement (noteamounts in the budgeted income statement should be the extended amounts and not the per unit prices and costs).

2. Compare the actual income statement amounts with the amounts in the budgeted income statement and determine the amount of each variance and indicate whether each variance is favorable or unfavorable.