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labor hour. Determine the total fixed factory overhead capacity. based 3. MINI-CASE Flexible budgeting, performance measurement, and ethics Maraga Manufacturing Inc. produces a single type

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labor hour. Determine the total fixed factory overhead capacity. based 3. MINI-CASE Flexible budgeting, performance measurement, and ethics Maraga Manufacturing Inc. produces a single type of small motor bookkeeper who does not have an in-depth understanding of acc principles prepared the following performance report with the heln hing . The LO3 p of production manager In a conversation with the sales manager, the production was overheard saying, "You sales guys really messed up our May mance, and it is only because production did such a great job controlli ng costs that we aren't in even worse shape." Maraga Manufacturing, Inc. Performance Report May, 2013 Flexible Budget Actual Results Master Budget Variance $25.00$1,125,000$1,250,000 $125,000U $212,500 $225,000 $12,500F 112,50011,750 F $569000 $600,000 $31000F Per Unit (45,000 units) (50,000 units) 7 Sales 8 Less variable expenses 9 Direct materials 10 Direct labor 11 Variable factory overhead 12 Variable selling and administrative expense 13 Total variable expense 175,750 187,500 25 14 Contribution margin $1200 5 Less fixed expenses 6 Fixed factory overhead expense 17 Fixed selling and administrative expense 18 Total fixed expense 19 Income from operations $100,000 $95,000 $100,000 $5,000F 250000 $255,000 $50,000 5 0000 Required: 1. Do you agree with the production manager that the manufacturing area did a good job of controlling costs? 2. Prepare a flexible budget for Maraga Manufacturing's expen following activity levels: 45,000 units, 50,000 units, and 55,000 3. Prepare a revised performance report, using the most approp at the units flexible budget from (2) above. 4. Now what is your response to the production manager's claim 5. Assume that you have just been hired as the new accountant observe that the production manager is about to r bonus based on the favorable mat a large

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