Requirements

Prepare a flexible budget based on the actual number of recliners sold.

Compute the cost variance and the efficiency variance for direct materials and

for direct labor. For manufacturing overhead, compute the variable

overhead cost, variable overhead efficiency, fixed overhead cost, and fixed

overhead volume variances. Round to the nearest dollar.

Have Hassan Recliners' managers done a good job or a poor job

controlling materials, labor, and overhead costs? Why?

Describe how Hassan Recliners' managers can benefit from the standard cost

system.