Exercise 16-34 (Algo) Flexible Budget (LO 16-2) Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 134,000 liters at a budgeted price of $330 per liter this year. The standard direct cost sheet for one liter of the preservative follows. (2 pounds @ Direct materials $42 $21) $42 Direct labor (0.5 hours @ $58) Variable overhead is applied based on direct labor hours. The variable overhead rate is $190 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $95 per unit. All non-manufacturing costs are fixed and are budgeted at $2.9 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $984,000 unfavorable. Required Prepare a flexible budget for Paynesville for the year. (Enter your answers in thousands of dollars.) PAYNE SVILLE CORPORATION Flexible Budget (thousands of dollars) Sales revenue Variable costs: Materials Direct labor Variable overhead Total variable costs Contribution margin Fixed costs: Manufacturing overhead Non-manufacturing