Problem 1) Static budget variance and Flexible budget variance

Sonnet Inc. has the following information for March 2018.

Master Budget for March 2018 Sales volume....2,100 diskettes

Average selling price per diskette$5.00/diskette

DM costs per diskette..$0.85/diskette

DM cost per lb.$17.00/lb

DM per diskette..0.05 lb/diskette

Direct Labor:

Direct labor cost per hour..$15.00/hr

# of diskettes produced per labor hour.. 30 diskettes

Direct Marketing costs$0.30 /diskette

Fixed overhead costs..$850/month

Actual for March 2018

Sales volume ..1,800 diskettes

Average selling price..$4,80/diskette

DM costs per diskette..$0.80/diskette

DM cost per lb.$20.00/lb

DM per diskette..0.04 lb/diskette

Direct Labor:

Direct labor cost per hour..$15.00/hr

# of diskettes produced per labor hour.. 25 diskettes

Direct Marketing costs$0.30 /diskette

Fixed overhead costs..$820/month

Required: Compute the following:

1) Static-budget variance for operating income (OI).

2) Flexible-budget variance for sales revenue.

3) Flexible-budget variance for OI.

4) Sales-volume variance for OI.

5) Rate (price) and Efficiency (quantity) variance for direct labor cost.

6) Price and Quantity variance for direct material cost.