Question 2:

Coach, Inc. makes a high-end Italian handbag. In December 2021. the management team collaborated on the preparation of a master budget for the year 2022. The budgeted costs were used as the basis for updating Coach's standard costing system. No further updates of standard costs took place in the year 2022. The budgeted and actual results for the year 2022 were: Master Budget Actual Results Sales revenue $4.;0,@ $4,620,375 Direct material purchases 1,200,000 1,336,482 Direct labor costs 515.200 539.181 Machine depreciation 816.500 940.000 Supervisors' salaries - Plant 341,000 368.600 Selling and administrative salaries .m L30m Net income 5 822,300 5 956,112 Other information: Unit sales 80.000 bags 83,250 bags Machine hours 33.600 hours 31,250 hours Direct material used (sheets of leather) 4,000 sheets 4,247 sheets Direct labor hours 22.400 hours 21,567 hours There were no beginning or ending inventories of raw materials, WIP ornished goods. On January 2. 2023, Coach, Inc. accepted an order from Stuart Weitzman for a large qua nh'ty of handbags. Stuart Weitzman's clients are willing to pay a premium for high quality goods, Coach decided to ensure the quality of their handbags. so they restrained all oftheir laborers and acquired new machinery. They also changed their suppliers to one that sells smaller batches of higher quality leather