Solid Box Fabrications manufactures boxes for workstations. The firms standard cost sheet prior to October of the current year and actual results for October are as follows:

Required information {The following information applies to the questions displayed below.] Solid Box Fabrications manufactures boxes for workstations. The firm's standard cost sheet prior to October of the current year and actual results for October are as follows: Budget Information Standard Price and Variable Fixed Costs per Unit Costs Actual Results October 9,500 $ 551,000 $50.00 $ 12.60 51,200 16*x $3 = $ 153,600 5,200 hr $16.80 = Units Sales Variable costs: Direct materials 5 pounds at $2.50 per pound Direct labor 0.50 hour at $14.00 per hour Manufacturing overhead Selling and administrative Total variable costs Contribution margin Fixed costs: Manufacturing (factory) overhead Selling and administrative Total fixed costs Operating income 7.00 2.00 5.00 $ 26.60 $ 23.40 87,360 10,000 45,000 $ 295,960 $ 255,040 $ 46,000 20,000 $ 66,000 $ 55,000 20,000 $ 75,000 $ 180,040 *Assume that pounds purchased = pounds issued to production (i.e., a JIT inventory policy). In preparing the master budget for October, the firm recognized that several items on the standard cost sheet were expected to change. For example, the selling price of the product was expected to increase by 8%. Suppliers have notified the firm that starting October 1, materials prices would be 5% higher. The labor contract prescribes a 10% increase, starting October 1, on wages and benefits. Fixed manufacturing costs were expected to increase $5,000 for insurance, property taxes, and salaries. Fixed selling and administrative costs were expected to increase as follows: $2,000 in managers' salaries and $2,000 for advertising during October. The unit sales for October were expected to be 10,000 units. Solid Box Fabrications uses a JIT approach in all of its operations, including materials acquisitions and product manufacturing. Required: 1. Prepare the master (static) budget and pro forma budgets for 9,500 units and 11,000 units for October. 2. Calculate and label as favorable or unfavorable the master (static) budget variance (total operating-income variance) for October Break this variance down into the sales volume variance and the total flexible-budget variance for the period. 3. Compute and label as favorable or unfavorable each of the following variances for October: selling price variance, total variable cost flexible-budget (FB) variance, and total fixed cost variance. 4. Break down the total direct materials flexible-budget variance and the total direct labor flexible-budget variance into their price (rate) and quantity (efficiency) components. Label each component variance as favorable or unfavorable. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the master (static) budget and pro forma budgets for 9,500 units and 11,000 units for October. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Master (Static) Budget 10,000 Pro Forma Budgets 9,500 11,000 Units Sales Variable costs: Direct materials Direct labor Manufacturing overhead Selling and administrative Total variable costs Contribution margin Fixed costs: Manufacturing Selling and administrative Total fixed costs Operating income 0 0 $ S 0 $ os 0S 0 $ 0S 0 $ $ Required 1 Required 2 > Required information Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate and label as favorable or unfavorable the master (static) budget variance (total operating-income variance) for October. Break this variance down into the sales volume variance and the total flexible-budget variance for the period. (Do not round intermediate calculations. Round your answers to the nearest whole dollar. Indicate the effect of each variance "Favorable", "Unfavorable" or "None" for no effect (i.e., zero variance).) Show less Total master (static) budget variance Sales volume variance, in terms of operating income Total flexible-budget variance Unfavorable Unfavorable Favorable Required information Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute and label as favorable or unfavorable each of the following variances for October: selling price variance, total variable cost flexible-budget (FB) variance, and total fixed cost variance. (Do not round intermediate calculations. Round your answers to the nearest whole dollar. If a variance has no amount, select "None" in the corresponding dropdown cell. Indicate the effect of each variance "Favorable", "Unfavorable" or "None" for no effect (i.e., zero variance).) Show less Selling price variance Total variable cost flexible-budget (FB) variance Total fixed cost variance Favorable Unfavorable None Required information Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Break down the total direct materials flexible-budget variance and the total direct labor flexible-budget variance into their price (rate) and quantity (efficiency) components. Label each component variance as favorable or unfavorable. (Do not round intermediate calculations. Round your answers to the nearest whole dollar. Indicate the effect of each variance "Favorable", "Unfavorable" or "None" for no effect (i.e., zero variance).) Show less Unfavorable Unfavorable Direct materials: Purchase-price variance Usage variance Direct labor Rate variance Efficiency variance Unfavorable Unfavorable