Q.6

Rooney Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for Year 3 follow.

	Static Budget					Actual Results
Production in units			34,000	kits				36,500	kits
Direct materials		$	204,000				$	257,000
Direct labor			170,000					175,200
Variable manufacturing overhead			51,000					57,250
Total variable costs			425,000					489,450
Fixed manufacturing overhead			205,000					199,200
Total manufacturing cost		$	630,000				$	688,650

Required a. Convert the static budget into a flexible budget. b. Calculate the variances.

Required A Required B Convert the static budget into a flexible budget. (Do not round intermediate calculations.) Flexible Budget 36,500 Kits Production in units Direct materials Direct labor Variable manufacturing overhead Total variable costs Fixed manufacturing overhead Total manufacturing costs Required A Required B Calculate the variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Variances Direct materials Direct labor Variable manufacturing overhead Total variable costs Fixed manufacturing overhead Total manufacturing costs