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1.	Prepare a flexible budget based on the actual number of recliners sold.
2.	Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Round to the nearest dollar.
3.	Have Juda's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why?
4.	Describe how Juda's managers can benefit from the standard costing system.

Data table

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		Static Budget (1,000 recliners)	Actual Results (980 recliners)
Sales	(1,000 recliners x $495 each)	$495,000
	(980 recliners x $480 each)		$470,400
Variable Manufacturing Costs:
Direct Materials	(6,000 yds. @ $8.50 / yd.)	51,000
	(6,143 yds. @ $8.30 / yd.)		50,987
Direct Labor	(10,000 DLHr @ $9.40 / DLHr)	94,000
	(9,600 DLHr @ $9.60 / DLHr)		92,160
Variable Overhead	(6,000 yds. @ $5.20 / yd.)	31,200
	(6,143 yds. @ $6.60 / yd.)		40,544
Fixed Manufacturing Costs:
Fixed Overhead		60,600	62,600
Total Cost of Goods Sold		236,800	246,291
Gross Profit		$258,200	$224,109

Requirement 1. Prepare a flexible budget based on the actual number of recliners sold. (Round budget amounts per unit to the nearest cent.)

Juda Recliners
Flexible Budget
	Budget
	Amounts
	per Unit
Actual Units (Recliners)
Sales Revenue
Variable Manufacturing Costs:
Direct Materials
Direct Labor
Variable Overhead
Fixed Manufacturing Costs:
Fixed Overhead
Total Cost of Goods Sold
Gross Profit

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