Fanning Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for 2019 follow:

	Static Budget					Actual Results
Production in units	30,000 kits					32,400 kits
Direct materials		$	201,000				$	255,080
Direct labor			171,000					178,380
Variable manufacturing overhead			45,000					51,300
Total variable costs			417,000					484,760
Fixed manufacturing overhead			213,000					208,800
Total manufacturing cost		$	630,000				$	693,560

Required

a. Convert the static budget into a flexible budget.

b. Calculate the variances.

• Required A
• Required B

Convert the static budget into a flexible budget. (Do not round intermediate calculations.)

	Flexible Budget
Production in units	32,400	Kits
Direct materials
Direct labor
Variable manufacturing overhead
Total variable costs	0
Fixed manufacturing overhead
Total manufacturing costs	$0

Calculate the variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

	Variances
Direct materials
Direct labor
Variable manufacturing overhead
Total variable costs
Fixed manufacturing overhead
Total manufacturing costs