Prescott Enterprises has prepared the following budgeted income statement based upon 117,500 board games. In addition, sales of 140,000 board games resulted in the corresponding results for the month of November:

a. Prepare a flexible budget for the month based on actual board games sold.

b. Calculate the following variances for each line item: static budget variance, sales volume variance, and flexible budget variance.

c. Based upon these variances, provide a few insights into what is driving Prescotts results for November. I am seeking the why not a factual statement that a variance is favorable or unfavorable. Note: if you use Excel to complete the schedule above, you do not need to round numbers, but if completing on paper, round all standards to the nearest penny.

\begin{tabular}{|c|c|c|c|c|} \hline \multirow{2}{*}{ Sales } & \multicolumn{2}{|r|}{ Budget } & \multicolumn{2}{|r|}{ Actuals } \\ \hline & \multicolumn{2}{|c|}{$2,350,000} & \multicolumn{2}{|c|}{$2,660,000} \\ \hline \multicolumn{5}{|l|}{ Variable Expenses: } \\ \hline Direct materials & $ & 725,000 & $ & 715,000 \\ \hline Direct labor & $ & 250,000 & $ & 250,000 \\ \hline Variable overhead & $ & 480,000 & $ & 565,000 \\ \hline Contribution Margin & $ & 895,000 & & 130,000 \\ \hline \multicolumn{5}{|l|}{ Fixed Expenses: } \\ \hline Fixed ovehead & $ & 250,000 & $ & 270,000 \\ \hline Fixed selling \& admin & $ & 500,000 & $ & 495,000 \\ \hline Net Operating Income: & $ & 145,000 & $ & 365,000 \\ \hline \end{tabular}