Koch Medical Equipment Company makes a blood pressure measuring kit. Albert Kaiser is the production manager. The production departments static budget and actual results for 2015 follow. Static Budget Actual Results Production in units 22,000 kits 23,800 kits Direct materials $ 149,600 $ 200,340 Direct labor 127,600 132,040 Variable manufacturing overhead 33,000 38,200 Total variable costs 310,200 370,580 Fixed manufacturing overhead 209,000 203,900 Total manufacturing cost $ 519,200 $ 574,480 Required: a. Convert the static budget into a flexible budget. (Do not round intermediate calculations.) b. Calculate variances and indicate the effect of each variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

Koch Medical Equipment Company makes a blood pressure measuring kit. Albert Kaiser is the production manager. The production department's static budget and actual results for 2015 follow Production in units Direct materials Direct labor Variable manufacturing overhead Static Budget 22,000 kits $149.600 127.600 33,000 Actual Results 23,800 kits $200,340 132,040 38,200 Total variable costs Fixed manufacturing overhead 310,200 209,000 370,580 203,900 Total manufacturing cost $519,200 $574,480 Required a. Convert the static budget into a flexible budget. (Do not round intermediate calculations.) Flexible Budget 23,800 Kits Production in units Direct materials Direct labor Variable manufacturing overhead Total variable costs Fixed manufacturing overhead Total manufacturing costs b. Calculate variances and indicate the effect of each variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) Variances Direct materials Direct labor Variable manufacturing overhead Total variable costs Fixed manufacturing overhead Total manufacturing costs