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

	Actual	Master Budget
Units	3,900	3,200
Sales revenue	$ 54,700	$ 60,000
Variable manufacturing costs	10,700	16,000
Fixed manufacturing costs	12,600	13,400
Variable selling and administrative expenses	7,200	8,000
Fixed selling and administrative expenses	8,600	10,250

Required: Show work for all intermediate calculations.

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. 3,900 units.

b. 4,300 units.