Klamaty, SA., is looking for feedback on performance. The company compares the budget for the year with the actual costs. Klamaty, SA., had the following budgeted data:

Unit sales for 2019 10,000

Unit production for 2019 10,000

Budgeted fixed overhead for 2019:

Supervision $18,000

Depreciation 20,000

Rent 10,000

Budgeted variable costs per unit:

Direct materials $18.00

Direct labour 25.00

Supplies 0.20

Indirect labour 1.00

Power 0.10

The following actually occurred:

Actual unit sales for 2019 11,000

Actual unit production for 2019 12,000

Actual fixed overhead for 2019:

Supervision $17,850

Depreciation 20,000

Rent 10,000

Actual variable costs for 2019:

Direct materials $214,000

Direct labour 320,000

Supplies 2,500

Indirect labour 10,000

Power 1,500

Required: a) Prepare a performance report for all costs showing static budget variances.

b) Prepare a performance report for all costs showing flexible budget variances

c) Evaluate the variances.