Noel Enterprises has budgeted sales in units for the next five months as follows:

June	6,800 units
July	5,400 units
August	7,200 units
September	4,600 units
October	3,800 units

Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 400 units. The company needs to prepare a production budget for the second quarter of the year. The total number of units to be produced in July is:

5,580 units5,400 units6,120 units5,220 units

18

Tulip Midwifery's cost formula for its wages and salaries is $3,110 per month plus $423 per birth. For the month of January, the company planned for activity of 135 births, but the actual level of activity was 146 births. The actual wages and salaries for the month was $65,310. The wages and salaries in the flexible budget for January would be closest to:

$65,310

$60,215

$64,868

$64,949

19

Tysor Framing's cost formula for its supplies cost is $2,780 per month plus $11 per frame. For the month of July, the company planned for activity of 800 frames, but the actual level of activity was 804 frames. The actual supplies cost for the month was $11,403. The spending variance for supplies cost in July would be closest to:

$177 U

$221 F

$177 F

$221 U