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Part 2)

Part 3)

Part 4)

Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 136,000 liters at a budgeted price of $345 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor (2 pounds @ $22) (0.5 hours @ $60) $44 30 Variable overhead is applied based on direct labor hours. The variable overhead rate is $200 per direct labor hour. The fixed overhead rate (at the master budget level of activity) is $100 per unit. All non-manufacturing costs are fixed and are budgeted at $3 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $1,026,000 unfavorable. The following is the actual income statement in thousands of dollars) for the year. $45,218 Sales revenue Less variable costs Direct materials Direct labor Variable overhead Total variable costs Contribution margin Less fixed costs Fixed manufacturing overhead Non-manufacturing costs Total fixed costs Operating profit 4,718 3,710 12,330 $20,758 $24, 460 1,230 1.412 $22,640 $21,820 During the year, the company purchased 212,000 pounds of material and employed 58,400 hours of direct labor. Required: a. Compute the direct material price and efficiency variances b. Compute the direct labor price and efficiency variances. c. Compute the variable overhead price and efficiency variances. The master budget at Western Company last period called for sales of 225,000 units at $11.00 each. The costs were estimated to be $4.00 variable per unit and $270,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was $11.10 per unit. Variable costs were $4.75 per unit. Actual fixed costs were $270,000. Required: Prepare a flexible budget for Western WESTERN COMPANY Flexible Budget The master budget at Western Company last period called for sales of 225,300 units at $9.3 each. The costs were estimated to be tual production and actual sales were 230,300 units. The selling price was $9.40 per unit. Variable costs were $4.80 per unit. Actual fixed costs were $225,300. Required: Prepare a sales activity variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) WESTERN COMPANY Sales Activity Variance Flexible Budget Sales Activity Variance Master Budget Sales revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profits The master budget at Western Company last period called for sales of 225.200 units at $9.20 each. The costs were estimated to be $3.77 variable per unit and $225,200 fixed. During the period, actual production and actual sales were 230,200 units. The selling price was $9.30 per unit. Variable costs were $4.70 per unit. Actual fixed costs were $225,200. Required: Prepare a profit variance analysis, (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) WESTERN COMPANY Profit Variance Analysis Manufacturing Variances Actual Budget Sales Price Variance Master Flexible Budget Sales Activity Variance Budget Sales revenue Less Variable costs Contribution margin Less: Foxed costs Operating profits