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 2019 follow:

	Static Budget					Actual Results
Production in units	21,000 kits					22,800 kits
Direct materials		$	136,500				$	185,200
Direct labor			115,500					118,200
Variable manufacturing overhead			31,500					37,700
Total variable costs			283,500					341,100
Fixed manufacturing overhead			208,000					202,800
Total manufacturing cost		$	491,500				$	543,900

Required

a. Convert the static budget into a flexible budget.

b. Calculate the variances.

	Flexible Budget
Production in units	22,800	Kits
Direct materials
Direct labor
Variable manufacturing overhead
Total variable costs	$0
Fixed manufacturing overhead
Total manufacturing costs	$0

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