1. Flexible Budget

Pohle Designs has a department that makes high-quality leather cases for iPads. Consider the following data for a recent month:

	Budget formula per unit	Various levels of output
Units Sales Variable Cost Direct materials Hand labor Fixed costs Depreciation Salaries	$19 ? 4.40	10,000 11,000 12,000 $ ? $ ? $ ? 65,000 ? ? ? ? ? ? 18,000 ? ? ? 33,000

Fill in the unknowns.

2. Basic Flexible Budget

The budgeted prices for materials and direct labor per unit of finished product are $8 and $7, respectively. The production manager is delighted about the following data:

	Static Budget	Actual Costs	Variance
Direct materials Direct labor	$59,200 51,800	$49,900 39,200	$9,300F 12,600F

Is the managers happiness justified? Prepare a report that might provide a more detailed explanation of why the static budget was not achieved. Good output was 5,300 units.