The following information is available for Brownstone Products Company for the month of July:

	Actual	Master Budget
Units	3,900	3,200
Sales revenue	$ 54,300	$ 60,000
Variable manufacturing costs	10,500	16,000
Fixed manufacturing costs	12,400	13,000
Variable selling and administrative expenses	7,000	8,000
Fixed selling and administrative expenses	10,200	10,050

Required:

1. What was the master budget variance for July? Was this variance favorable or unfavorable?

2. Compute the July sales volume variance and the flexible-budget variance for the month, both in terms of contribution margin and in terms of operating income.

4. Prepare pro-forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels:

a. 3,860 units.

b. 4,260 units.

What was the master budget variance for July? Was this variance favorable or unfavorable? (Indicate the effect of each variance by selecting "F" for Favorable, "U" for Unfavorable, and "None" for no effect (i.e., zero variance).) Compute the July sales volume variance and the flexible-budget variance for the month, both in terms of contribution margin and in terms of operating income. (Indicate the effect of each variance by selecting "F" for Favorable, "U" for Unfavorable, and "None" for no effect (i.e., zero variance).) Prepare pro-forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels: a. 3,860 units. b. 4,260 units