Using the budget data in the plant accountant's report, compute the expected cost per unit based on the budgeted volume of 18,000 units.

a. Using this information, create an alternative budget based on the actual volume of 14,000.

b. Compute variances between this alternative budget and the actual figures given by the plant accountant.

Budget Actual Variance Units 18,000 14,000 4,000 Sales $864,000 $686,000 $178,000 U Variable manufacturing costs: Direct material $108,000 $85,400 $22,600 F Direct labor 288,000 246,000 42,000 F Indirect labor 57,600 44,400 13,200 F Idle time 14,400 14,200 200 F Cleanup time 10,800 10,000 800 F Miscellaneous supplies 5,200 4,000 1,200 F Total variable manufacturing cost $484,000 $404,000 $80,000 F Variable shipping costs $28,800 $28,000 $800 F Total variable costs $512,800 $432,000 $80,800 F Contribution margin $351,200 $254,000 $97,200 U Nonvariabie manufacturing costs: Supervision Rent Depreciation Other Total nonvariable manufacturing costs Seiiing and administrative costs Total nonvariable and programmed costs Operating income (loss) $57,600 $58,800 $1 ,200 20,000 20,000 60,000 60,000 -- 10,400 10,400 -- $148,000 $149,200 $1,200 112,000 112,000 -- $260,000 $261 ,200 $1 ,200 91 ,200 -7,200 -98,400