Garden Products Inc. produces a number of products, including handmade large fiberglass planters for outdoor displays. The firm, which began operations at the beginning of the current year, uses a standard cost system. The standard cost for one large planner are provided below:

Direct Material (3 lbs @ $8.00) $24.00

Direct Labor (2 hrs @ $15.00) $30.00

Variable Overhead $24.00

Fixed Overhead $6.00

Standard cost per unit $84.00

The $6.00 fixed overhead rate is based on total budgeted fixed overhead costs of $18,000 and estimated sales of 3,000 units. There were no changes in any inventory account during the period. The company produced and sold 3,100 units at the following costs:

Direct Materials (9,000 lbs) $81,270

Direct Labor (6,000 hrs) $78,000

Variable Overhead $76,000

Fixed Overhead $16,500

Total Production Costs Incurred $251,770

Required A) Prepare a flexible budget to evaluate the current year performance. Comment on how well the company managed production costs.

B) Compute the following flexible budget variance and label as Favorable (F) or Unfavorable (U). Show your work.

(a) Direct Materials Price Variance

(b) Direct Materials Quantity Variance

(c) Direct Labor Rate Variance

(d) Direct Labor Efficiency Variance