The Milieu Manufacturing Company (MMC) makes and sells two products, A and B. Each product is made up of two raw materials, RM-1 and RM-2. Established standards and projected costs for the next year are as follows: Product RM-I RM-2 Input Cost $10/unit $15/unit DLabor $20/hr. VariableOH 50%DL$ Total standard variable cost Product Budgeted sales Actual sales Actual production Actual selling price Quantity Anticipated market size Anticipated market share Actual market size Actual market share A 2 units 3 units 4 hrs 4 hrs Cost $20 $45 $80 $40 $185 $500 Quantity 3 units 4 units A 10000 units 11325 units 11500 units $490 5 hrs Budgeted and actual unit and selling price figures were as follows: 5 hrs B Budgeted selling price Fixed OH costs: $3,600,000, allocated on the practical capacity basis of 90,000 direct labor hours. Selling and Administrative costs: $2,000,000. 170,000 units 10% 165,000 units ? Cost $30 $60 $100 $50 $240 $600 B 7000 units 6000 units 7500 units $610 Actual results were as follows: Input RM-1 RM-2 DLabor Variable OH Fixed OH B.Bal. Required: 2000 units 4000 units Selling and Administration Purchases 47,000 units 64,000 units Cost $477,050 $950,400 C. In total, calculate the: 1. Fixed overhead budget variance 2. Fixed overhead volume variance $1,634,075 $ 840,000 $3,575,000 $2,086,000 Product A 22,500 units 36,225 units 45,000 hrs Use Product B 22,000 units 31.500 units 36,500 hrs Part I. A. Produce a budgeted Income Statement B. Produce a flexible budget Income Statement C. Produce an actual Income Statement: assume that any beginning RM inventory cost the same per unit as this year's actual unit price. Assume there was no beginning FG inventory. D. What is the total operating income variance? Part II. A. For each product, calculate the 1. Materials price variance 2. Materials usage variance 3. Direct labor rate variance 4. Direct labor efficiency variance 5. Variable overhead rate variance 6. Variable overhead efficiency variance B. Analyze MMC's variable cost variances and provide reasonable explanations for what may have caused them. 3. Amount of under or over-applied overhead 4. Overhead spending variance if MMC uses a three-way OH variance 5. Total overhead flexible budget variance if MMC uses a two-way OH variance. D. Taking into account all manufacturing variances, analyze MMC's operating efficiency. Part III. A. Calculate: 1. Individual and total selling price variances 2. The sales volume variance 3. The sales mix variance 4. The market size variance 5. The market share variance B. Taking all the sales and market variances into account. evaluate MMC's overall effectiveness.