Jax's production costs -

Direct Labor $ 5.00 per unit 15 minutes of labor

Raw Materials $ 12.00 per unit 2 pounds of raw material

Variable Overhead $ 2.50 per unit 50% of direct labor cost

Fixed Overhead $ 100,000

1. Assume that the company is planning on producing 100,000 units of Jax next month. Prepare the production cost budget for this product.

2. The company produced only 98,000 units of ABC and incurred the following actual costs:

Direct labor	$ 499,800
Raw Materials	$1,127,000
Overhead	$ 350,000

Prepare a budget variance report using a flexible budget.