Harv Busta owns and operates River Adventure Kayaks a small that manufactures one model of fiberglass Kayak Built for the while water kayaking. The following relates to budgeted and actual production and sales for River Adventure Kayaks during 2019

Standard Cost for one Kayak is as follows: Direct Material Resin 2Gallons @ $30.00/Gallon $60/ Kayak Direct Labor 3 Hours @30/Hour $90/Kayak Variable manufacuring overhead: $4/Direct Labour hours $12/Kayak Fixed Manufacuring Overhead $180,000 Per Year (applied using direct labour hours) $24/dlh = $180,000/7500 dlh

Budgeted production and sales 2500 Kayaks Budgeted Selling Price $400/Kayak

Other Information: Variable selling and Administrative costs shipping $40 per kayak Commision (5% of selling Price) $20 per Kayak Fixed selling and administrative costs $90,000 per year

River Adventure Kayaks' Planned sales for 2019 2500 Kayaks Estimated 2019 Industry sales for similar types of Kayaks 20,000 Kayaks

During 2019

River adventure Kayaks produced and sold = 2400 Kayaks, The total market for similar Kayaks was 24000 kayaks Actual selling prices = $440/Kayak 5000 gallons of resin was purchased costing $160,000 and 4860 gallons were used in production. Direct Labor cost for 2019 $218,500 and 7600 Hours direct labor hours were worked during the year

Actual manufacturing overhead costs incurred in 2019 were: Variable manufacturing overhead = $29,260 Fixed Manufacturing Overhead = 186,200 ------------ Total = 215,460 Actual Selling and Administrative costs incurred in 2019 were Shipping Costs $ 97,200 Commission $ 52,800 ---------------------- Fixed Selling and Administrative $ 150,000

Required

1. Develop a flexible Budget profit plan (Income Statement) for 2019 listing all revenues and expenses in a contribution mrgin format. 2. Determine the sales price and sales volume variances( calculate the sales volumes variance based on budgeted contribution margin). 3. Determine the market share and market size variances based on contribution margin. 4. Determine the material price and quantify variances for resin. The Price variance should be computed on materials purchased. 5. Determine the direct labor rate and efficiency variances 6. Compute the variable manufacturing overhead flexible budget variance. 7. Compare the Fixed Manufacturing overhead budget variance.