Juda Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system Juda allocates overhead based on yards of direct materials. The company's performance report includes the following selected data Click the icon to view the selected data) Read the requirements Static Budget (1,025 recliners) Actual Results (1,005 recliners) $ 527 875 492,450 53,505 53,550 Sales (1,025 recliners x $515 each) (1.005 recliners x $490 each) Variable Manufacturing Costs: Direct Materials (6,150 yds. @ $8.70 / yd.) (6,300 yds. @ $8.50 / yd.) Direct Labor (10,250 DLHr @ $10.90 / DLH) (9,850 DLHr @ $11.10 / DLH) Variable Overhead (6,150 yds. @ $5.10 / yd.) (6,300 yds @ $6.50 / yd.) Fixed Manufacturing Costs: 111,725 109,335 31.365 40,950 62,730 64,730 Fixed Overhead 259,325 268,565 Total Cost of Goods Sold $ 268,550 $ 223,885 Gross Profit Requirement 1. Prepare a flexible budget based on the actual number of recliners sold (Round budget amounts per unit to the nearest cent) Juda Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue Variable Manufacturing Costs Direct Materials Direct Labor Variable Overhead Fixed Manufacturing Costs Fixed Overhead Total Cost of Goods Sold TAN Total Cost of Goods Sold Gross Profit Requirement 2. Compute the cost variance and the efficiency variance for direct matenals and for direct labor For manufacturing overhead, compute the variable overhead cost variable overhead efficiency, fixed overhead cost, and foxed overhead volume variances. Round to the nearest dollar Begin with the cost variances Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar Abbreviations used AC # actual cost, AQ = actual quantity, FOH = fixed overhead SC = standard cost, so standard quantity) Formula Variance = Direct materials cost variance Direct labor cost variance Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor and identify whether each variance is favorable (F) or unfavorable (U) (Round your answers to the nearest whole dollar Abbreviations used AC = actual cost AQ = actual quantity, FOH = fixe overhead, SC - standard cost, 5Q - standard quantity) Formula Variance Direct materials officiency variance Direct labor efficiency variance Now compute the variable overhead cost and efficiency variances Select the required formulas, compute the variable overhead cost and efficiency variances, and identity whether each variance is favorable (F) or unfavorable (U) (Round your answers to the nearest whole dollar. Abbreviations used. AC = actual cost, AQ = actual quantity, FOH = fixed overhead, SC = standard cost, SQ = standard quantity, VOH - variable overhead) Formula Variance VOH cost variance VOH efficiency variance Now compute the faced overhead cost and volume variances Select the required formulas, compute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorablo (U) (Round your answers to the nearest whole dollar. Abbreviations used. AC = actual cost, AQ = actual quantity, FOH = fixed overhead SC = standard cost, SQ = standard quantity) Formula Variance FOR cost variance FOH volume variance Requirement 3. Have Juda's managers done a good job or a poor job controlling materials, tabor and overhead costs? Why? The variances computed in Requirement 2 suggest that the managers have done a job controlling materials and labor costs. The direct materials cost variance and direct labor efficiency variance help offset the W direct labor cost variance and direct materials officiency variance Managers have done a job controlling overhead costs as evidenced by the fact that of the overhead variances are Requirement 4. Describe how Juda's managers can benefit from the standard costing system Standard costing helps managers do the following The variances computed in Requirement 2 suggest that the managers have offset the 1 denced by th n the standa Create new products Decrease accounting costs Develop more efficient production methods Identify performance standards Increase production levels Increase sales volume Prepare the master budget Set sales prices of products and services Set target levels of performance for flexible budgets