Munoz Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for Year 3 follow.

	Static Budget		Actual Results
Production in units	27,000	kits	29,400	kits
Direct materials	$ 178,200		$ 231,240
Direct labor	151,200		158,040
Variable manufacturing overhead	40,500		46,700
Total variable costs	369,900		435,980
Fixed manufacturing overhead	210,000		205,600
Total manufacturing cost	$ 579,900		$ 641,580

Required

1. Convert the static budget into a flexible budget.
2. Calculate the variances.