The management of Magnificent Modems, Inc. (MMI) is uncertain as to the volume of sales that will exist in Year 1. The president of the company asked the chief accountant to prepare flexible budget income statements assuming that sales activity amounts to 3,000 and 6.000 units. The static budget is shown in the following form. Required a. Complete the following worksheet to prepare the appropriate flexible budgets. b. Calculate and show the flexible budget variances for the static budget versus the flexible budget at 6,000 units. c. Indicate whether each variance is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) MAGNIFICENT MODEMS, INC. Flexible Budget Income Statements Cost per Static unit Budget Flexible Budgets Volume Variance Number of units 4,000 3,000 6,000 Sales revenue un 140 $ 560,000 Variable manufacturing costs. Materials 120,000 Labor 60,000 Overhead 32,000 Variable selling, general & administrative 40.000 Contribution margin 308,000 Fixed costs. Manufacturing rent 70,000 Depreciation on manufacturing equipment 80,000 Selling, general & administrative expenses 102,950 Depreciation on administrative equipment 32,000 $ 23,050 $(53,950) $177.050 Net income (loss)