Problem 1:

Part A:

Flexy Flextime wants to review the budget using a Flexible Budget. The actual sales for the period are $200,000 with a $10 per unit sales price. Sales units were budgeted for 18,000 units this period. Cost of goods sold is budgeted at $4 per unit. Selling expenses are variable at $1.50 per unit. Administrative expenses are fixed at $35,000. Calculate the actual units sold and prepare a flexible budget.

Part B:

Makeshift Company produced 3,000 units of material using 2,080 direct labor hours at a total cost of $31,200. The standards for direct labor are 0.75 direct labor hours for every unit at an hourly rate of $13 per hour.

Calculate (a) the labor rate variance______

and (b) the labor efficiency variance.______