Write a one page letter to the company owner summarizing:

A) Give a brief explanation of the numerical results of your variance analysis and do NOT state the results as such "DM price variance was unfavorable by $500." Instead use wording such as "The unfavorable DM price variance of only $100 indicates we paid we paid a small amount more than standard."

B) Brief explanation of items of concern or good(noteworthy) results from your variance analysis. Look at the overall results and make comments such as "The FAV DM price variance combined with the UNFAV DL efficiency variance could indicate that the purchasing department is buying poor quality DM & that could be the cause of the of the DL efficiency variance."

Letter must be in standard business format with a date, inside address, salutation, and closing from you. Example in link below.

https://owl.purdue.edu/owl/subject_specific_writing/professional_technical_writing/basic_business_letters/index.html

Templates Direct Materials Actual Input Quantity x Budgeted (Standard) Price Actual Cost Flexible Budget (Applied) Purchases $ 741.000 Usage $ 711,100 $ 810,000 $ 747,500 $ (69,000) FAV Price Variance $ 36,400 FAV Efficiency Varieance Actual Cost Direct Labor Actual Input Quantity x Budgeted (Standard) Price Flexible Budget (Applied) 1 12.50 yards 26.00 avg $ $5,500,000 $5,940,750 $6,345,700 Standards: Direct Materials Yards per awning Price per yard Direct Labor Hours per costume Rate per hour Variable MOH standard rate per direct labor hour Fixed MOH standard rate per direct labor hour Total budgeted fixed MOH cost $ (440,750) UNF Price Variance $ 404,950 FAV Efficiency Variance 62.00 hours $ 44.50 avg $ 4.35 per DL hour $ 9.47 per DL hour $1,250,000 $ (845,700) UNF Flexible Budget (TOTAL) Variance Actual Cost Variable Manufacturing Overhead Actual Input Quantity x Budgeted (Standard) Price Flexible Budget (Applied) $ 665,000 $ 580,725 $ 620,310 Actual cost and data from the current month: Actual number of yards of material purchased Actual cost of materials purchased Actual number of yards used in production Actual number of costumes produced Actual direct labor hours Actual direct labor cost Actual variable MOH Actual fixed MOH 28,500 S 28.42 810,000 27,350 yards 2,300 133,500 $ 41.20 $5,500,000 $ 665,000 $ 1,488,000 $ 84,275 UNF Spending Variance $ 39,585 FAV Efficiency Varience $ 44,690 UNF Flexible Budget (TOTAL) Variance Data Actual Cost Fixed Manufacturing Overhead Actual Input Quantity x Budgeted (Standard) Price Flexible Budget Allocated $ 1,488,000 $ 1,250,000 $1,250,000 $1,350,422 $ 238,000 UNF Spending Variance $ 100,422 FAV Production Volume Variance $ 238,000 UNF Flexible Budget (TOTAL) Variance Templates Direct Materials Actual Input Quantity x Budgeted (Standard) Price Actual Cost Flexible Budget (Applied) Purchases $ 741.000 Usage $ 711,100 $ 810,000 $ 747,500 $ (69,000) FAV Price Variance $ 36,400 FAV Efficiency Varieance Actual Cost Direct Labor Actual Input Quantity x Budgeted (Standard) Price Flexible Budget (Applied) 1 12.50 yards 26.00 avg $ $5,500,000 $5,940,750 $6,345,700 Standards: Direct Materials Yards per awning Price per yard Direct Labor Hours per costume Rate per hour Variable MOH standard rate per direct labor hour Fixed MOH standard rate per direct labor hour Total budgeted fixed MOH cost $ (440,750) UNF Price Variance $ 404,950 FAV Efficiency Variance 62.00 hours $ 44.50 avg $ 4.35 per DL hour $ 9.47 per DL hour $1,250,000 $ (845,700) UNF Flexible Budget (TOTAL) Variance Actual Cost Variable Manufacturing Overhead Actual Input Quantity x Budgeted (Standard) Price Flexible Budget (Applied) $ 665,000 $ 580,725 $ 620,310 Actual cost and data from the current month: Actual number of yards of material purchased Actual cost of materials purchased Actual number of yards used in production Actual number of costumes produced Actual direct labor hours Actual direct labor cost Actual variable MOH Actual fixed MOH 28,500 S 28.42 810,000 27,350 yards 2,300 133,500 $ 41.20 $5,500,000 $ 665,000 $ 1,488,000 $ 84,275 UNF Spending Variance $ 39,585 FAV Efficiency Varience $ 44,690 UNF Flexible Budget (TOTAL) Variance Data Actual Cost Fixed Manufacturing Overhead Actual Input Quantity x Budgeted (Standard) Price Flexible Budget Allocated $ 1,488,000 $ 1,250,000 $1,250,000 $1,350,422 $ 238,000 UNF Spending Variance $ 100,422 FAV Production Volume Variance $ 238,000 UNF Flexible Budget (TOTAL) Variance