Question 2: Cole Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Cole allocates overhead based on yards of direct ma The company's performance report includes the following selected data Static Budget Actual Results (975 recliners) (955 recliners) S 482,625 $ 453,625 Sales (975 recliners x S 495 each) (955 recliners x $ 475 each) Variable Manufacturing Costs: Direct Materials 52,065 52,087 Direct Labor 91,650 (5,850 yds @ $ 8.90 / yd.) (5.987 yds @ $ 8.70 / yd.) (9,750 DLHr@ $ 9.40 / DLHr) (9,350 DLHr@ $ 9.60 / DLHr) (5,850 yds @ $ 5.30 / yd.) (5,987 yds. @ 6.70 / yd.) 89,760 Variable Overhead 31,005 40.113 60.255 Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold 234.975 247,650 $ 62,255 244.215 209.410 Gross Profit 1. 2. Prepare a flexible budget based on the actual number of recliners sold. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhe cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Have Cole's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? Describe how Cole's managers can benefit from the standard costing system. 3. 4