Fanning Publications established the following standard price and costs for a hardcover picture book that the company produces.

Standard price and variable costs
Sales price	$	36.60
Materials cost		8.30
Labor cost		4.20
Overhead cost		5.90
Selling, general, and administrative costs		6.60
Planned fixed costs
Manufacturing overhead	$	128,000
Selling, general, and administrative		46,000

Fanning planned to make and sell 35,000 copies of the book.

Required:

a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 34,000 and 36,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 36,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

	Master Budget	Flexible Budgets	Flexible Budgets	Volume Variances	Volume Variances
Number of Units	35,000	34,000	36,000
Sales Revenue
Variable Manufacturing Costs
Labor
Manufacturing Overhead
Materials
Variable selling general, and administrative costs
Contribution margin
Fixed costs
Fixed selling, general, and administrative costs
Manufacturing Overhead
Net Income