Show me the steps to solve Spriggs Extreme wants to examine budget variances using a flexible budget. The data the company will use is found in the table below. The left column shows the original, "static" budget. The right column shows the actual results for the quarter. Complete the Flexible Budget and appropriate variances for the quarter. Be careful with the "signs." Positive numbers should be favorable variances and negative numbers are unfavorable. $($Hint: Shaded areas require an answer.$)$ This question is worth $26$ points. $-2$ points for each incorrect entry.

Managerial Accounting Form $7-1$

$\backslash$table$[[\backslash$table$[[$Spriggs Extreme Manufacturing$],[$Flexible Budget$]]],[$Revenue$,$Standard,$\backslash$table$[[$Static$],[$Budget$],[$for$],[$Quarter$]],\backslash$table$[[$Volume$],[$Variance$]],\backslash$table$[[$Flexible$],[$Budget$],[$for$],[$Quarter$]],\backslash$table$[[$Flexible$],[$Budget$],[$Variance$]],\backslash$table$[[$Actual$],[$Quarter$],[$Results$]]],[$Units sold,,$6,000,,,,5,400],[$Price per unit,$$125,$$$125,,,,$$$115],[$Total revenue,,$$750,000,,,,$$$621,000],[$Variable costs$],[$Direct material,$$45,$$$270,000,,,,$$$253,800],[$Direct labor,$$10,60,000,,,,51,300],[$Total var. cost,,$330,000,,,,305,100],[$Contribution$,,420,000,,,,315,900],[$Fixed manuf. overhead,$200,000,200\mathrm{.}000,,,,195,000],[$Gross profit,,$$220,000,,,,$$$120,900]]$

Spriggs begins by examining direct materials usage. Dividing the variance into two lowerlevel variance categories, Spriggs notes that the direct materials price variance is zero $($the company's materials suppliers are locked into long$-$term price agreements$).$

What can you say about the direct materials quantity variance? Your answer should include whether the direct materials quantity variance is favorable or unfavorable. This question is worth $5$ points.