Stenback Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Stenback allocates overhead based on yards of direct materials. The company's performance report includes the following selected data: (Click the icon to view the selected data.) Read the requirements. ... Requirement 1. Prepare a flexible budget based on the actual number of recliners sold. (Round budget amounts per unit to the nearest cent.) Stenback Recliners Flexible Budget Budget Amounts Actual Units (Recliners) Sales Revenue Variable Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold Gross Profit per Unit Requirement 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. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Direct materials cost variance Direct labor cost variance = = Formula Variance Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Direct materials efficiency variance Direct labor efficiency variance = = Formula = Variance Now compute the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) VOH cost variance VOH efficiency variance = Formula = Variance Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) FOH cost variance = FOH volume variance = Formula Variance job controlling materials and labor costs. The direct materials cost variance and direct labor efficiency variance help offset the job controlling overhead costs as evidenced by the fact that of the overhead variances are Requirement 3. Have Stenback's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? The variances computed in Requirement 2 suggest that the managers have done a direct labor cost variance and direct materials efficiency variance. Managers have done a Requirement 4. Describe how Stenback's managers can benefit from the standard costing system. Standard costing helps managers do the following: Data table Static Budget (975 recliners) Actual Results (955 recliners) Sales (975 recliners x $505 each) (955 recliners x $495 each) 492,375 472,725 Variable Manufacturing Costs: Direct Materials (5,850 yds. @ $8.50 / yd.) 49,725 (5,987 yds. @ $8.30 / yd.) 49,692 Direct Labor (9,750 DLHr @ $11.30 / DLHr) 110,175 (9,350 DLHr @ $11.40 / DLHr) 106,590 Variable Overhead (5,850 yds. @ $5.30 / yd.) 31,005 (5,987 yds. @ $6.70/yd.) 40,113 Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold Gross Profit 60,255 62,255 251,160 258,650 241,215 $ 214,075 Requirements 2. 1. 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. 3. Have Stenback's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? 4. Describe how Stenback's managers can benefit from the standard costing system.