Zachary Publications established the following standard price and costs for a hardcover plcture book that the company produces.

Standard price and variable costs

Sales price

Materials cost

Labor cost

Overhead cost

Selling, general, and administrative costs

Planned fixed costs

Manufacturing overhead

Selling, general, and administrative

$$36\mathrm{.}60$

$8\mathrm{.}00$

$3\mathrm{.}80$

$6\mathrm{.}00$

$7\mathrm{.}00$

$$134,0$

$53,000$

Zachary planned to make and sell $39,000$ coples of the book.

Requlred:

a$.-$ d$.$ Prepare the pro forma Income statement that would appear in the master budget and also flexlble budget Income statements,

assuming production volumes of $38,000$ and $40,000$ units. Determine the sales and varlable cost volume varlances, assuming volume

Is actually $40,000$ units. Indicate whether the varlances are favorable $($F$)$ or unfavorable $($U$).$

Note: Select "None" If there Is no effect $($l$.$e$.,$ zero varlance$).$