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 37,000 kits 39,200 kits Direct materials $ 273,800 $ 328,780 Direct labor 236,800 244,180 Variable manufacturing overhead 55,500 62,200 Total variable costs 566,100 635,160 Fixed manufacturing overhead 212,000 207,900 Total manufacturing cost $ 778,100 $ 843,060

Required:

a.

Convert the static budget into a flexible budget.

Production in units	39,200
Direct Materials
Direct Labor
Variable manufacturing overhead
Total variable costs	0
Fixed manufacturing overhead
Total manufacturing costs

b.

Calculate variances

Direct materials
direct labor
variable manufacturing overhead
total variable costs
fixed manufacturing overhead
total manufacturing costs