, XYZ Company prepared the following table showing a budget analysis of budget vs. actual expenses for the month of June. The initial budgeted values assumed 10,000 units- of production. Management is disappointed with the unfavorable variances for each (test category. The production manager has prepared her own calculations using a flexible budget and reports that there was actually no overall variance for the month. after adjusting for volume. ' Click in the boxed area beneath the word "Budget," and use the associated pick list to select alternative volume levels. The budget column values change (l.e., "flexible") based on volume. Examine the results and respond to the question at the bottom of the page, which wlil turn green upon selecting the correct response. Budget Analysis for June, 20XX Variable Manufacturing Direct material 5 442.000 5 360.000 5 (82,000) Direct labor 328,000 270,000 (58,000) Variable factory overhead 215.000 180.000 [35,000l Total variable costs 5 985.000 $ 810.000 $ (175.000) Fixed factory overhead 255.000 250.000 (5.000] Total manufacturing costs _$___1_.25}_Q,0_0_Q _$_'LDQ,DLLQ gm Which level of volume is consistent with the manager's claim? >>>> Standard DM price per pound (Lbs): $20 Standard DM needed per unit: 2 Lbs Standard DL rate: $15 per hour Standard DL hours per unit: 2 hours of Direct Labor per unit *The actual DM used for 11000 units of production is 24200 Ibs which means: 24200 lbs / 11000 actual units produced = 2.2 Ibs actual quantity of DM used per unit Actual DL hours: 20000 hours Variable Overhead Rate applied based on per DL hour: $10 *Note: I am helping you here! . AQ (AP-SP) = DM Price Variance . (AQ x AP) - (AQ x SP) = -42000 Favorable (less spending for DM) . $442,000 - (24200 x $20) = DM Price Variance . 442,000 - 484,000 = DM Price Variance . $42,000 Favorable DM Price Variance