Questions 6-9, please show formulas.

From this year's accounting records, Ana expects first quarter beginning inventory to consist of 600 units. She knows that the sales manager wants to end cach quarter with inventory levels the 10% of the following quarter's sales to provide a cushion for increases in demand. According to Jordan, material and labor requirements for next year should be about the same as in the past. From prior experience, Ana assumes that each sink will require about 40 pounds of material and 3 hours of direct labor Ana expects that 20,000 pounds of material will be on hand at the beginning of the year. She knows that Jordan prefers to have 10% of the next quarter's production on hand at the end of cach quarter. Given the inventory and materials usage requirements, she estimates the quantity of direct materials that will be purchases cach quarter. Ana calls the direct materials vendor, who tells her that the price should remain at $0.50 per pound over the next six months. She decides to budget $0.50 per pound for the entire year. She next examines payroll records and considers possible changes in labor rates. She expects to pay $12 per hour for labor throughout the next year. The accounting system includes four types of manufacturing overhead costs; indirect labor, supplies, depreciation, and "other" (everything else). Ana believes that cost behavior will remain the same as in past years. The only fixed overhead production cost is depreciation, which is calculated using the straight-line method. Because Jordan does not plan to purchase any new equipment next ycar, she estimates that depreciation will remain at S9,000 per quarter. Ana assumes that indirect labor, supplies and other costs are strictly variable. The costs are as follows: Variable Manufacturing Cost Per Direct Labor Hour $0.3000 Indirect Labor 0.2667 Supplies Other 0.1000 $0.6667 Total Ana combines the variable and fixed costs to create the manufacturing overhead budget Now that Ana has developed budgets for all of the production costs, she can complete a budget for the cost of goods manufactured and sold. Based on an examination of current year accounting records, she expects the beginning inventory of finished goods to consist of 600 units at a cost per unit of $50.4167, or $30,250. The company usually has no work in process at the end of cach quarter. The first in, first-out inventory cost flow assumption is used for financial reporting, so ending inventory is valued at the current year's production cost per unit. Ana reviews past records for selling and administration and considers possible changes in those costs. She estimates that depreciation should be $2,400 per quarter, salaries will be $40,000 per quarter and commissions will remain at 10% of revenues. Based on prior experience, she estimates bad debt expense at 2% of revenues. Other miscellancous costs will be budgeted at amounts similar to the last year with a small increment for inflation. Other Miscellancous Costs First Quarter $8,300 Second Quarter $7,400 Third Quarter $9,200 Fourth Quarter $7,300 Based on past experience, Ana expects Unique Sinks to be short of cash during some quarters. More houses are started in the spring and summer, so demand is high in the second and third quarters and is much lower in the first and fourth quarters. She develops a cash receipts and disbursements budget to plan for the company's borrowing needs. After reviewing the current year's cash collection patterns, Ana estimates that 66% of cach quarter's sales will be received in cash during the quarter and 32% will be received during the following quarter. She also estimates that $110,622 ($118,000 less allowance for uncollectible accounts of $7,378) of the current year's sales will be collected during the first quarter. She uses this information combined with amounts from the revenue budget to estimate the cash collections during cach quarter Employees are paid on the 15th and last day of each month, so cash is required for labor costs incurred during cach quarter. The company's materials vendor requires payment within 30 days, so Ana estimates that one-third of each quarter's purchases is paid during the following quarter. She also estimates that $72,370 of the prior year purchases will be paid during the first quarter. All other costs are paid during the quarter incurred except for income taxes. The company's tax accountant told Ana that a final payment on prior year taxes of approximately $7,000 will be due during the first quarter, and the company should make estimated payments of $40,000 cach during the 4th, 6th, 9th and 12th months of the year. According the Jordan, the company will probably pay a dividend of about $370,000 during the fourth quarter. Ana combines the preceding information with the planned direct material and labor cost information, manufacturing overhead, and selling and administration date to develop the cash receipts and disbursements budget Ana estimates that the company will begin next year with a cash balance of $45,820, which will not be sufficient to cover the excess of budgeted disbursements over receipts during the first part of the year. In addition, Jordan wants to maintain a cash balance of at least $30,000 at the end of each quarter Thus, Ana calculates the amounts of borrowing needed during the first part of the year, expected repayments during the latter part of the year, and interest costs. Ana believes that the annual interest rate will be 8%, or 2% per quarter. To be conservative, Ana does not budget any eamings on cash balances, even though Jordan sometimes invests excess cash in short-term securities. Ana summarizes this information in the short term financing budget. Ana uses the previous budget for revenue, cost of goods sold, selling and administration costs, interest expense on short-term financing, and an estimated income tax rate of 30% to prepare the budgeted income statement. In addition, she combines estimated beginning retained earmings of $165,322 with budgeted net income and the expected dividend payment to estimate ending retained carnings. To prepare the budgeted balance sheet, Ana begins with an estimated beginning balance sheet for next year based on the most recent information for current period. She then estimated next year's ending balance sheet amounts based on the assumed transactions in the preceding budgcts. Once Ana completes the master budget, she prints the various budgets for Jordan's review and approval. He is pleased that the company should have no debt at the end of the year, be able to pay a S370,000 dividend, and still have a healthy cash balance of over $50,000. Ana has worked for him for many years, so he is confident that her estimates reflect current business conditions Given these strong results, Jordan wonder whether he should reduce the dividend and use the extra cash to invest in some new manufacturing cquipment that could reduce spoilage rates and labor costs. He asks Ana to develop an analysis of the costs and benefits of the potential purchase before he makes a final decision. Otherwise, he tells Ana that he approves the budget. Develop the Direct Materials and Direct Labor Budget 3. Unique Sinks Direct Material and Direct Labor Requirements December 31, 2019 Q1 Q2 Q3 Q4 Required Production Materials Pounds of Material Per Unit Pounds of Material Used Labor Labor Hours Per Unit Labor Hours Used Once again Ana assumes that first-quarter sales for the following year will be the same as year's first-quarter sales. budget Develop a Direct Materials Purchase Budget 4. Unique Sinks Direct Materials Purchases December 31, 2019 Q1 Q2 Q3 Q4 Ending Inventory Production Requirements Total DM Required Less Beginning Inventory Required Purchases 5. Develop a Direct Materials and Direct Labor Budget Unique Sinks Direct Material and Direct Labor Budget December 31, 2019 Q1 Q2 Q3 Q4 Materials Direct Material Purchases Cost Per Pound Total Material Cost Labor Labor Hours Used Labor Hours Per Unit Total Labor Cost Total DM and DL Costs 6 Develop the Manufacturing Overhead Budget Unique Sinks Manufacturing Overhead Budget December 31, 2019 Q1 Q2 Q3 Q4 Total Variable Overhead Costs Indirect Costs Supplies Other Total Variable Costs Fixed Overhead Costs Depreciation Total Fixed Costs Total Manufacturing Overhead Total Fixed Overhead Costs Total Labor Hours Used in Production Variable Manufacturing Overhead Allocation Rate Per DL hour Fixed Manufacturing Overhead Allocation Rate Per DL hour Multiply the direct labor hours needed for production by the variable cost per direct labor hour to determine the variable costs for cach quarter. Ana calculates the fixed overhead allocation rate by dividing annual budgeted fixed overhead costs by predetermined allocation base Develop the Budgeted Statement of Cost of Goods Manufactured and Sold 7. Unique Sinks Cost of Goods Manufactured and Sold December 31, 2019 Q1 Q2 Q3 Q4 Total Beginning DM Plus Purchases Less Ending DM Cost of DM Used Cost of DL used Allocated MOH Cost of Goods Manufactured Beginning Finished Goods Goods Available for Sale Less Ending Finished Goods Cost of Goods Sold 8. Develop the Selling and Administration Budget. Unique Sinks Selling and Administration Budget December 31, 2019 Total Q1 Q2 Q3 Q4 Variable Costs Commissions Bad Debts Total Variable Costs Fixed Costs Salaries Depreciation Other Total Fixed Costs Total Selling and Administration Costs Develop the cash Receipts and Disbursements Budget 9. Unique Sinks Cash Budget December 31, 2019 Q1 Q2 Q3 Q4 Total Receipts From Current Quarter's Sales From Prior Quarter (net of bad debts) Total Receipts Disbursements For Current Quarter's Purchases For Prior Quarter's Purchases Direct Labor Costs Indirect Labor Supplies Other Production Costs Salaries Commissions Other Selling & Admin Costs Income Taxes Dividends Total Disbursements Excess Receipts (Disbursements) 12. Develop Budgeted Balance Sheet Unique Sinks Balance Sheet 31-Dec-18 Assets Liabilities Accounts Payable Income Taxes Payable Cash Raw Materials Inventory Finished Goods Inventory Account Receivables, net Total Liabilities Stockholders' Equity Total Current Assets Common Stock Retained Earnings Land, Building and Equipment Accumulated Dep Total Equity Total Liabilities and Equity Total Assets *Use Cell Reference Unique Sinks has now finished the third quarter of the budget year, and sales during the third quarter were poor. The dramatic drop in housing prices caused local contractors to cancel construction projects and rescind orders for sinks. Fortunately, Jordan responded quickly to changing conditions and cut back production to 7,000 units. By October, Jordan believes that the low level of new house construction might contimue. He asks Ana to prepare a cost variance analysis for the third quarter as he considers ways to cut production costs. To focus on production costs, Ana creates a variance report for the third quarter based on the mumber of units produced, instead ofnumber ofunits sold She designs the report to show both static budget variances and flexible budget variances. Both budgets use the variable production costs per umit calculated in Unique Sinks The statics budget variances give the impression that operations during the third quarter were very efficient. Total costs were far less than budgeted; however, Ana knows that she would expect to see favorable static budget variances because the actual production volume of 7,000 was much lower than planned All of the variable costs would be overstated in the static budget therefore, this report provides poor-quality information for analyzing productions costs. From the flexible budget vaniances, Ana leams that direct labor costs were significantly higher than expected. She knows that Jordan was reluctant to lay workers off when sales orders were dropped. Thus, more workers were on hand than needed for the volume of production None of the other variances were large, so Ana decided to focus Jordan's attention on the direct labor variance Assignment 1. Develop a Flexible Budget a. Create input section from Third Quarter Budget INPUT SECTION-THIRD QUARTER BUDGET ASSUMPTIONS Income Statement Information: Cash Flow Information: Master Budget Sales Volume-units Revised forecast of sales volume-units Second Quarter Sales % Prior Qtr Sales Collected Price per unit % Current Otr Sales Collected Variable Production Costs Third Quarter Production (units) Third Quarter DM Purchases (pounds) Direct Material-Pounds Direct Material-Cost per Pound Prior Quarter DM Purchases Direct Labor- Hours Direct Labor-Cost per % Prior Qtr Purchases Paid Hour % Current Qtr Purchases Paid Overhead (per DL hour) Other Costs Paid During Third Quarter Variable Selling & Administration Costs: Direct Labor Commission as 9% of Indirect Labor revenue Bad Debts as % of Supplies Other Production revenue Fixed Costs: Salaries Production Commissions Fixed Production Alloc. (per DL hour) Selling & Administration Other Selling & Administration Income Tax Estimated Payment Develop Mamufacturing Overhead Budget for Third-Quarter 2. Unique Sinks Manufacturing Overhead Budget December 31, 2019 Variable Production Costs Fixed Overhead Costs Direct Materials Production Direct Labor Selling & Administration Overhead Total Fixed Costs Variable Selling & Administration Costs: Commission Bad Debt Total Variable Cost Per Unit Develop Operating Income and Breakeven Point 3. Operating Income and Break-even point Flexible Master Flexible Budget Budget Budget Units Sold Sales Variable Costs Contribution Margin Fixed Costs Incurred Operating Income Breakeven Point in Units Operating income for the master budget in this schedule is different from that in the master budget. This schedule includes production fixed costs incured, whereas the income statement included production fixed costs allocated. The two amounts are reconciled as follows: $151,079 $9,000 - (12,600 units x $0.7558) $150,555 Develop Cash Receipts and Disbursements 7,000 units 4. Cash Receipts and Disbursements Master Flexible Budget Budget Units Sold Receipts From Current Qtr's Sales From Prior Qtr's Sales Total Receipts Disbursements For Current Qtr's Purchases For Prior Qtr's Purchases Direct Labor Costs Indirect Labor Supplies Other Production Costs Salaries Commissions Other S&A Income Taxes Total Disbursements Excess Receipts (Disbursements) 5. Develop Static and Flexible Production Budget Variance Report Static and Flexible Production Budget Variance Report Static Budget Variances Flexible Budget Variances Master Actual Flexible Actual Budget Costs Budget Costs Units Produced Variable Production Cost Direct Material Direct Labor Overhead Fixed Production Costs Total Costs As Jordan studies the flexible budget variances, he realizes that he may need to lay off some of the production workers. He does not believe that the housing market will recover soon, and the company cannot afford the cost ovenuns. But he does not want to lay off workers, so what other considerations should he first consider for ways to contain costs or to increase sales volumes. *Use Cell Reference From this year's accounting records, Ana expects first quarter beginning inventory to consist of 600 units. She knows that the sales manager wants to end cach quarter with inventory levels the 10% of the following quarter's sales to provide a cushion for increases in demand. According to Jordan, material and labor requirements for next year should be about the same as in the past. From prior experience, Ana assumes that each sink will require about 40 pounds of material and 3 hours of direct labor Ana expects that 20,000 pounds of material will be on hand at the beginning of the year. She knows that Jordan prefers to have 10% of the next quarter's production on hand at the end of cach quarter. Given the inventory and materials usage requirements, she estimates the quantity of direct materials that will be purchases cach quarter. Ana calls the direct materials vendor, who tells her that the price should remain at $0.50 per pound over the next six months. She decides to budget $0.50 per pound for the entire year. She next examines payroll records and considers possible changes in labor rates. She expects to pay $12 per hour for labor throughout the next year. The accounting system includes four types of manufacturing overhead costs; indirect labor, supplies, depreciation, and "other" (everything else). Ana believes that cost behavior will remain the same as in past years. The only fixed overhead production cost is depreciation, which is calculated using the straight-line method. Because Jordan does not plan to purchase any new equipment next ycar, she estimates that depreciation will remain at S9,000 per quarter. Ana assumes that indirect labor, supplies and other costs are strictly variable. The costs are as follows: Variable Manufacturing Cost Per Direct Labor Hour $0.3000 Indirect Labor 0.2667 Supplies Other 0.1000 $0.6667 Total Ana combines the variable and fixed costs to create the manufacturing overhead budget Now that Ana has developed budgets for all of the production costs, she can complete a budget for the cost of goods manufactured and sold. Based on an examination of current year accounting records, she expects the beginning inventory of finished goods to consist of 600 units at a cost per unit of $50.4167, or $30,250. The company usually has no work in process at the end of cach quarter. The first in, first-out inventory cost flow assumption is used for financial reporting, so ending inventory is valued at the current year's production cost per unit. Ana reviews past records for selling and administration and considers possible changes in those costs. She estimates that depreciation should be $2,400 per quarter, salaries will be $40,000 per quarter and commissions will remain at 10% of revenues. Based on prior experience, she estimates bad debt expense at 2% of revenues. Other miscellancous costs will be budgeted at amounts similar to the last year with a small increment for inflation. Other Miscellancous Costs First Quarter $8,300 Second Quarter $7,400 Third Quarter $9,200 Fourth Quarter $7,300 Based on past experience, Ana expects Unique Sinks to be short of cash during some quarters. More houses are started in the spring and summer, so demand is high in the second and third quarters and is much lower in the first and fourth quarters. She develops a cash receipts and disbursements budget to plan for the company's borrowing needs. After reviewing the current year's cash collection patterns, Ana estimates that 66% of cach quarter's sales will be received in cash during the quarter and 32% will be received during the following quarter. She also estimates that $110,622 ($118,000 less allowance for uncollectible accounts of $7,378) of the current year's sales will be collected during the first quarter. She uses this information combined with amounts from the revenue budget to estimate the cash collections during cach quarter Employees are paid on the 15th and last day of each month, so cash is required for labor costs incurred during cach quarter. The company's materials vendor requires payment within 30 days, so Ana estimates that one-third of each quarter's purchases is paid during the following quarter. She also estimates that $72,370 of the prior year purchases will be paid during the first quarter. All other costs are paid during the quarter incurred except for income taxes. The company's tax accountant told Ana that a final payment on prior year taxes of approximately $7,000 will be due during the first quarter, and the company should make estimated payments of $40,000 cach during the 4th, 6th, 9th and 12th months of the year. According the Jordan, the company will probably pay a dividend of about $370,000 during the fourth quarter. Ana combines the preceding information with the planned direct material and labor cost information, manufacturing overhead, and selling and administration date to develop the cash receipts and disbursements budget Ana estimates that the company will begin next year with a cash balance of $45,820, which will not be sufficient to cover the excess of budgeted disbursements over receipts during the first part of the year. In addition, Jordan wants to maintain a cash balance of at least $30,000 at the end of each quarter Thus, Ana calculates the amounts of borrowing needed during the first part of the year, expected repayments during the latter part of the year, and interest costs. Ana believes that the annual interest rate will be 8%, or 2% per quarter. To be conservative, Ana does not budget any eamings on cash balances, even though Jordan sometimes invests excess cash in short-term securities. Ana summarizes this information in the short term financing budget. Ana uses the previous budget for revenue, cost of goods sold, selling and administration costs, interest expense on short-term financing, and an estimated income tax rate of 30% to prepare the budgeted income statement. In addition, she combines estimated beginning retained earmings of $165,322 with budgeted net income and the expected dividend payment to estimate ending retained carnings. To prepare the budgeted balance sheet, Ana begins with an estimated beginning balance sheet for next year based on the most recent information for current period. She then estimated next year's ending balance sheet amounts based on the assumed transactions in the preceding budgcts. Once Ana completes the master budget, she prints the various budgets for Jordan's review and approval. He is pleased that the company should have no debt at the end of the year, be able to pay a S370,000 dividend, and still have a healthy cash balance of over $50,000. Ana has worked for him for many years, so he is confident that her estimates reflect current business conditions Given these strong results, Jordan wonder whether he should reduce the dividend and use the extra cash to invest in some new manufacturing cquipment that could reduce spoilage rates and labor costs. He asks Ana to develop an analysis of the costs and benefits of the potential purchase before he makes a final decision. Otherwise, he tells Ana that he approves the budget. Develop the Direct Materials and Direct Labor Budget 3. Unique Sinks Direct Material and Direct Labor Requirements December 31, 2019 Q1 Q2 Q3 Q4 Required Production Materials Pounds of Material Per Unit Pounds of Material Used Labor Labor Hours Per Unit Labor Hours Used Once again Ana assumes that first-quarter sales for the following year will be the same as year's first-quarter sales. budget Develop a Direct Materials Purchase Budget 4. Unique Sinks Direct Materials Purchases December 31, 2019 Q1 Q2 Q3 Q4 Ending Inventory Production Requirements Total DM Required Less Beginning Inventory Required Purchases 5. Develop a Direct Materials and Direct Labor Budget Unique Sinks Direct Material and Direct Labor Budget December 31, 2019 Q1 Q2 Q3 Q4 Materials Direct Material Purchases Cost Per Pound Total Material Cost Labor Labor Hours Used Labor Hours Per Unit Total Labor Cost Total DM and DL Costs 6 Develop the Manufacturing Overhead Budget Unique Sinks Manufacturing Overhead Budget December 31, 2019 Q1 Q2 Q3 Q4 Total Variable Overhead Costs Indirect Costs Supplies Other Total Variable Costs Fixed Overhead Costs Depreciation Total Fixed Costs Total Manufacturing Overhead Total Fixed Overhead Costs Total Labor Hours Used in Production Variable Manufacturing Overhead Allocation Rate Per DL hour Fixed Manufacturing Overhead Allocation Rate Per DL hour Multiply the direct labor hours needed for production by the variable cost per direct labor hour to determine the variable costs for cach quarter. Ana calculates the fixed overhead allocation rate by dividing annual budgeted fixed overhead costs by predetermined allocation base Develop the Budgeted Statement of Cost of Goods Manufactured and Sold 7. Unique Sinks Cost of Goods Manufactured and Sold December 31, 2019 Q1 Q2 Q3 Q4 Total Beginning DM Plus Purchases Less Ending DM Cost of DM Used Cost of DL used Allocated MOH Cost of Goods Manufactured Beginning Finished Goods Goods Available for Sale Less Ending Finished Goods Cost of Goods Sold 8. Develop the Selling and Administration Budget. Unique Sinks Selling and Administration Budget December 31, 2019 Total Q1 Q2 Q3 Q4 Variable Costs Commissions Bad Debts Total Variable Costs Fixed Costs Salaries Depreciation Other Total Fixed Costs Total Selling and Administration Costs Develop the cash Receipts and Disbursements Budget 9. Unique Sinks Cash Budget December 31, 2019 Q1 Q2 Q3 Q4 Total Receipts From Current Quarter's Sales From Prior Quarter (net of bad debts) Total Receipts Disbursements For Current Quarter's Purchases For Prior Quarter's Purchases Direct Labor Costs Indirect Labor Supplies Other Production Costs Salaries Commissions Other Selling & Admin Costs Income Taxes Dividends Total Disbursements Excess Receipts (Disbursements) 12. Develop Budgeted Balance Sheet Unique Sinks Balance Sheet 31-Dec-18 Assets Liabilities Accounts Payable Income Taxes Payable Cash Raw Materials Inventory Finished Goods Inventory Account Receivables, net Total Liabilities Stockholders' Equity Total Current Assets Common Stock Retained Earnings Land, Building and Equipment Accumulated Dep Total Equity Total Liabilities and Equity Total Assets *Use Cell Reference Unique Sinks has now finished the third quarter of the budget year, and sales during the third quarter were poor. The dramatic drop in housing prices caused local contractors to cancel construction projects and rescind orders for sinks. Fortunately, Jordan responded quickly to changing conditions and cut back production to 7,000 units. By October, Jordan believes that the low level of new house construction might contimue. He asks Ana to prepare a cost variance analysis for the third quarter as he considers ways to cut production costs. To focus on production costs, Ana creates a variance report for the third quarter based on the mumber of units produced, instead ofnumber ofunits sold She designs the report to show both static budget variances and flexible budget variances. Both budgets use the variable production costs per umit calculated in Unique Sinks The statics budget variances give the impression that operations during the third quarter were very efficient. Total costs were far less than budgeted; however, Ana knows that she would expect to see favorable static budget variances because the actual production volume of 7,000 was much lower than planned All of the variable costs would be overstated in the static budget therefore, this report provides poor-quality information for analyzing productions costs. From the flexible budget vaniances, Ana leams that direct labor costs were significantly higher than expected. She knows that Jordan was reluctant to lay workers off when sales orders were dropped. Thus, more workers were on hand than needed for the volume of production None of the other variances were large, so Ana decided to focus Jordan's attention on the direct labor variance Assignment 1. Develop a Flexible Budget a. Create input section from Third Quarter Budget INPUT SECTION-THIRD QUARTER BUDGET ASSUMPTIONS Income Statement Information: Cash Flow Information: Master Budget Sales Volume-units Revised forecast of sales volume-units Second Quarter Sales % Prior Qtr Sales Collected Price per unit % Current Otr Sales Collected Variable Production Costs Third Quarter Production (units) Third Quarter DM Purchases (pounds) Direct Material-Pounds Direct Material-Cost per Pound Prior Quarter DM Purchases Direct Labor- Hours Direct Labor-Cost per % Prior Qtr Purchases Paid Hour % Current Qtr Purchases Paid Overhead (per DL hour) Other Costs Paid During Third Quarter Variable Selling & Administration Costs: Direct Labor Commission as 9% of Indirect Labor revenue Bad Debts as % of Supplies Other Production revenue Fixed Costs: Salaries Production Commissions Fixed Production Alloc. (per DL hour) Selling & Administration Other Selling & Administration Income Tax Estimated Payment Develop Mamufacturing Overhead Budget for Third-Quarter 2. Unique Sinks Manufacturing Overhead Budget December 31, 2019 Variable Production Costs Fixed Overhead Costs Direct Materials Production Direct Labor Selling & Administration Overhead Total Fixed Costs Variable Selling & Administration Costs: Commission Bad Debt Total Variable Cost Per Unit Develop Operating Income and Breakeven Point 3. Operating Income and Break-even point Flexible Master Flexible Budget Budget Budget Units Sold Sales Variable Costs Contribution Margin Fixed Costs Incurred Operating Income Breakeven Point in Units Operating income for the master budget in this schedule is different from that in the master budget. This schedule includes production fixed costs incured, whereas the income statement included production fixed costs allocated. The two amounts are reconciled as follows: $151,079 $9,000 - (12,600 units x $0.7558) $150,555 Develop Cash Receipts and Disbursements 7,000 units 4. Cash Receipts and Disbursements Master Flexible Budget Budget Units Sold Receipts From Current Qtr's Sales From Prior Qtr's Sales Total Receipts Disbursements For Current Qtr's Purchases For Prior Qtr's Purchases Direct Labor Costs Indirect Labor Supplies Other Production Costs Salaries Commissions Other S&A Income Taxes Total Disbursements Excess Receipts (Disbursements) 5. Develop Static and Flexible Production Budget Variance Report Static and Flexible Production Budget Variance Report Static Budget Variances Flexible Budget Variances Master Actual Flexible Actual Budget Costs Budget Costs Units Produced Variable Production Cost Direct Material Direct Labor Overhead Fixed Production Costs Total Costs As Jordan studies the flexible budget variances, he realizes that he may need to lay off some of the production workers. He does not believe that the housing market will recover soon, and the company cannot afford the cost ovenuns. But he does not want to lay off workers, so what other considerations should he first consider for ways to contain costs or to increase sales volumes. *Use Cell Reference