Requirement 3 (25 points) a. Calculate the standard cost per unit for direct materials and standard rate per unit for direct labor. (The formulas are given above next to the "Direct Materials" and "Direct Labor" items. The standard costs that you calculate are the amounts you will use for your flexible budget for each of these costs). b. Prepare a flexible production budget including Revenues, Total Variable Costs, Total Fixed Costs, Total Costs and Net Income, for the three levels of activity (number of units to break even, number of units to achieve a $25,000 profit, number of units to achieve a $40,000 profit). The CEO is convinced of the Director of Sales' ability to achieve a profit of $40,000 a month and reports those costs on the company's static budget. However, actual sales for the first month were 12,900 units. The actual revenues and expenses for the month were: VARIABLE COSTS (per unit) Sales: Direct Materials: Direct Labor: $237,457 $15,200 $58,050 Indirect Materials: Indirect Labor: $1,305 $2,200 Utilities for Factory: $8,900 Supplies for Factory: $1,925 Variable Administrative Salaries $9,702 Variable Sales Commissions: $14,760 FIXED COSTS (per month) Factory Supervisor Salaries: $43,000 Factory Depreciation: $15,500 Property Taxes (Factory): $4,500 Insurance (Factory): $3,500 Maintenance (Factory): $1,860 Fixed Sales Salaries $10,000 Depreciation, Sales Equip. $12,250 Advertising $5,720