Harris Miniature Sports Cars makes popular high quality models of expensive cars, such as the Maserati. Master budget data and actual results for the most recent quarter of operations are as follows:

	Master Budget	Actual results
Sales (# of cars)	15,000	12,000
Revenues	$375,000	$300,000
Variable costs	75,000	54,000
Fixed costs	150,000	141,000
Profit	$150,000	$105,000

Mr. Harris is alarmed that actual revenue decreased by 20% and more importantly, that the actual profit decreased by 30% compared to the master budget. Because of these numbers, the owner is convinced that both marketing director and the production manager did not do a good job last quarter.

1. Compute Harriss flexible budget for the most recent quarter of operations.

2. Calculate Harriss sales volume and sales price variances for the month.

3. What were Harriss variable cost and fixed cost variances for the most recent quarter?

4. In light of your answers to the variance calculations, who do you believe is responsible for the poor profit performance last quarter?