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Prepare a performance report that will assist Lexi in evaluating her efforts to control production costs. (If variance is zero, select Not Applicable and enter

Prepare a performance report that will assist Lexi in evaluating her efforts to control production costs. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.)
Price/Rate/Spending Variance Quantity/Efficiency Variance
Direct materials $ UnfavorableFavorableNot Applicable $ UnfavorableFavorableNot Applicable
Direct labor Not ApplicableFavorableUnfavorable UnfavorableFavorableNot Applicable
Variable overhead UnfavorableNot ApplicableFavorable FavorableUnfavorableNot Applicable
Fixed overhead Not ApplicableFavorableUnfavorable Not ApplicableFavorableUnfavorable
Total $ UnfavorableFavorableNot Applicable $

Not ApplicableFavorableUnfavorable

please help with"

Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 340 cases off the production line before the end of the month. But as she glanced over the rest of numbers, Lexi couldnt help but wonder if there were errors in some of the line items. She was puzzled how most of the operating expenses could be higher than the budget since she had worked hard to manage the production line to improve efficiency and reduce costs. Yet the report, shown below, showed a different story.
Actual Budget Variance
Cases produced and sold 10,250 9,910 340 Favorable
Sales revenue $1,930,000 $1,853,200 $76,800 Favorable
Direct material 555,951 545,050 10,901 Unfavorable
Direct labor 265,241 257,660 7,581 Unfavorable
Variable manufacturing overhead 282,447 277,480 4,967 Unfavorable
Variable selling expenses 92,292 89,190 3,102 Unfavorable
Variable administrative expenses 41,364 39,640 1,724 Unfavorable
Contribution margin 692,705 644,180 48,525 Favorable
Fixed manufacturing overhead 110,001 109,010 991 Unfavorable
Fixed selling expenses 68,875 69,370 495 Favorable
Fixed administrative expenses 128,632 128,830 198 Favorable
Operating income $385,197 $336,970 $48,227 Favorable
Lexi picked up the phone and called Irvin. Irvin, I dont get it. We beat the budgeted operating income for the month, but look at all the unfavorable variances on the operating costs. Can you help me understand whats going on? Let me look into it and Ill get back to you, Irvin replied. Irvin gathered the following additional information about the months performance.
Direct materials purchased: 101,082 pounds at a total of $555,951
Direct materials used: 101,082 pounds
Direct labor hours worked: 26,262 at a total cost of $265,241
Machine hours used: 40,581
Irvin also found the standard cost card for a case of product.
Standard Price Standard Quantity Standard Cost
Direct materials $5.5 per pound 10 pounds $55
Direct labor $10 per DLH 2.58 DLH 25.80
Variable overhead $7 per MH 4 MH 28.00
Fixed overhead $2.73 per MH 4 MH 10.92
Total standard cost per case $119.72

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