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1. Tempo Company's fixed budget (based on sales of 14,000 units) folllows. Fixed Budget Sales (14,000 units $201 per unit) 2,814,000 Costs Direct materials 350,000 Direct labor 588,000 Indirect materials 378,000 Supervisor salary 150,000 Sales commissions 98,000 Shipping 224,000 Administrative salaries 200,000 DepreciationOffice equipment 170,000 Insurance 140,000 Office rent 150,000 Income 366,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.

2. Camila Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (15 pounds @ $3 per pound) $ 45 Direct labor (2 hours @ $16 per hour) 32 During June the company incurred the following actual costs to produce 8,000 units. Direct materials (122,400 pounds @ $2.70 per pound) $ 330,480 Direct labor (19,900 hours @ $16.20 per hour) 322,380 AR = Actual Rate SR = Standard Rate AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance.

3. Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Flexible Budget at 80% Capacity Actual Results Production (in units) 50,250 44,400 Overhead Variable overhead $ 276,375 Fixed overhead 50,250 Total overhead $ 326,625 $ 308,300 (1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.

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