Loreto Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the same amount of resources. The following information is from the static budget for 2017:

Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labor:

Read the requirements 3.

Requirement 1. Calculate the sales-volume variance and flexible-budget variance for operating income.

Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable (F) or unfavorable (U). (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label.)

	Actual
	Results
Output units
Revenues
Direct materials
Direct manufacturing labor
Fixed costs
Total costs
Operating income

Flexible-Budget		Flexible
Variance		Budget
	(1)
	(2)
	(3)
	(4)
	(5)
	(6)
	(7)

Sales-Volume		Static
Variance		Budget
	(8)
	(9)
	(10)
	(11)
	(12)
	(13)
	(14)

Requirement 2. Compute price and efficiency variances for direct materials and direct manufacturing labor.

Compute the price and efficiency variances for direct materials. Label each variance as favorable (F) or unfavorable (U).

Price variance		(15)
Efficiency variance		(16)

Compute the price and efficiency variances for direct manufacturing labor. Label each variance as favorable (F) or unfavorable (U).

Price variance		(17)
Efficiency variance		(18)

1: Data Table

Expected production and sales	6,400	units
Expected selling price per unit	$775
Total fixed costs	$1,300,000

2: Data Table

	Standard Quantity	Standard Price	Standard Unit Cost
Direct materials	15 pounds	$10 per pound	$150
Direct manufacturing labor	3.3 hours	$50 per hour	$165

During 2017, actual number of units produced and sold was 4,900, at an average selling price of $800. Actual cost of direct materials used was $743,750, based on 62,500 pounds purchased at $11.90 per pound. Direct manufacturing labor-hours actually used were 19,500, at the rate of $41.00 per hour. As a result, actual direct manufacturing labor costs were $799,500. Actual fixed costs were $1,210,000. There were no beginning or ending inventories.

3: Requirements

1.	Calculate the sales-volume variance and flexible-budget variance for operating income.
2.	Compute price and efficiency variances for direct materials and direct manufacturing labor.