Static Budget Actual Results (1,000 recliners) (980 recliners) $ 505,000 5 470,400 51,600 51,601 92,000 Sales (1,000 recliners x $505 each) (980 recliners x 5480 each) Variable Manufacturing Costs: Direct Materials (6,000 yds 58.60d.) (6,143 yds. 58.40/d.) Direct Labor (10,000 DLH 59.20/DLHr) (9,600 DLHr @ 59.30/DLH) Variable Overhead (6,000 yds 55.201yd.) (6,143 yds @ $6.60'yd.) Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold Gross Profit 89,280 31,200 40,544 60,600 235,400 $ 269,600 62,600 244,025 5 226,375 Requirements 1. Prepare a flexible budget based on the actual number of recliners sold. 2. 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 3. Have Morton's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? 4. Describe how Morton's managers can benefit from the standard cost system