Zeitun Company makes and sells canned olives. In 2020, the company planned to sell 5,000 boxes of olives. The table below contains numbers that Zeituns managers included in the Master Budget.

The companys master budget appears in the first column of the table.

	Master Budget (5,000 units)	Flexible Budget (4,000 units)	Flexible Budget (6,000 units)
Direct materials	$15,000
Direct labor	30,000
Variable manufacturing overhead	6,000
Fixed manufacturing overhead	16,000
Total manufacturing cost	$67,000

Required:

1. Complete the table and prepare Zeituns manufacturing flexible budget for 4,000 and 6,000 boxes. You can add columns or rows to the table if needed.

2. Year 2020 was more successful than planned. The company was able to sell 6,000 boxes of canned olives. Moreover, the selling price of each box was $22.5, and not $22 as planned.

The company had to introduce workplace health safety measures, which increased the variable manufacturing overhead by 60c per box of olives. The fixed manufacturing overhead for year 2020 was $18,000.

3. Prepare a budgeted income statement based that shows the actual results, and compute the flexible budget variances. Are these variances favorable or unfavorable?

4. In your opinion, was the company successful in Year 2020? Explain.