The management of Rooney Modems, Inc. (RMI) 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 7,000 and 11,000 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 11,000 units. c. Indicate whether each variance is favorable (F) or unfavorable (U). (Select "None" if there is no effect (.e., zero variance).) ROONEY MODEMS, INC. Flexible Budget Income Statements Cost per Static unit Budget Flexible Budgets 9,000 7,000 11,000 Volume Variance Number of units $ 120 1,080,000 45 30 405,000 270,000 54,000 72,000 279,000 Sales revenue Variable manufacturing costs: Materials Labor Overhead Variable selling, general & administrative Contribution margin Fixed costs: Manufacturing rent Depreciation on manufacturing equipment Selling, general & administrative expenses Depreciation on administrative equipment Net income (loss) 63,000 73,000 92,100 25,000 $ 25,900 $(36,100) $ 87,900 d. Complete the following Worksheet to prepare the appropriate texible budgets b. Calculate and show the flexible budget variances for the static budget versus the flexible budget at 11.000 units. Indicate whether each variance is favorable (F) or unfavorable (U). (Select "None" if there is no effect (1.e., zero variand Volume Variance ROONEY MODEMS, INC. Flexible Budget Income Statements Cost per Static Flexible Budgets unit Budget Number of units 9,000 7,000 11,000 Sales revenue $ 120 1,080,000 Variable manufacturing costs: Materials 45 405,000 Labor 30 270,000 Overhead 54,000 Variable selling, general & administrative 72,000 Contribution margin 279,000 Fixed costs: Manufacturing rent 63,000 Depreciation on manufacturing equipment 73,000 Selling, general & administrative expenses 92,100 Depreciation on administrative equipment 25,000 Net income (loss) $ 25,900 $(36,100) $ 87,900 None