Vanadium Audio Inc is a small manufacturer of electronic musical instruments. You are the Controller and you submitted the monthly variance report (see below table) to the company's managers last week. The Plant Manager, Darius James, sent you the following email: "I just received this factory report for the latest month of operations. I'm not very pleased with these figures. The variances are too large. If I understand the accounting approach being used here, you are assuming that my costs are variable to the units produced. Thus, as the production volume declines, so should these costs. Well, I don't believe these costs are variable at all. I think they are fixed costs. As a result, when we operate below capacity, the costs really don't go down. I'm being penalized for costs I have no control over. I need this report to be redone to reflect this fact. If anything, the difference between actual and budget is essentially a volume variance. Listen, I know that you are a team player but you really need to reconsider your assumptions on this one. Can we discuss this before you send the report to headquarters?" Write an email or memorandum to Darius. It must be in this format to receive full points. Incorporate the following in your memo: description of variable factory overhead controllable variance criticisms and benefits of standard costs concepts of 'relevant range' timeline for establishing standard (i.e., when are the standards set?) whether you will reclassify some of the expenses y: Respond to another student by discussing how they chose to address Darius' concerns. Budgeted Variance Factory Overhead Expense Actual at Actual Controllable Variance Favorable / Unfavorable Production Supplies $42,000.00 $39,780.00 $(2,220.00) U Power and light $52,500.00 $50,900.00 $(1,600.00) Indirect factory wages $39,100.00 $30,600.00 $(8,500.00) Total $133,600.00 $121,280.00 $(12,320.00)