The actual information pertains to the month of June. As part of the budgeting process, Petrified Products Company developed the following master budget for June. The manager, Pete, is in the process of preparing the flexible budget and understanding the results.

	master budget	flexible budget	actual results
sales volume (in units)	25,000		20,000
sales	$1,250,000	$	$1,000,000
variable costs	600,000		512,000
contribution margin	650,000		488,000
capacity-related (fixed) costs	450,000		458,000
operating profit	200,000		30,000

1) The flexible budget will report $________ for the flexible (variable) costs.

a. $512,000

b. $600,000

c. $480,000

d. $640,000

2) The flexible budget will report $________ for the capacity-related (fixed) costs

a. $458,000

b. $450,000

c. $360,000

d. $572,500

3) The flexible budget variance for flexible (variable) costs is

a. $32,000 unfavorable

b. $120,000 unfavorable

c. $32,000 favorable

d. $120,000 favorable