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Stage 2 It is the EdTech control system that costing & management department is responsible for quarterly performance review and variance analysis. The costing & management accounting team analyze the result and compare the actual result with the budgets (static and flexible), report on the significant variances. The major variances are investigated, explanation and proposed corrective actions are suggested to the management for consideration. At the end the first quarter (Q1), Eric presents the following management reports and static budget of the Q1 for your review. Standard per Static Budget Product: LP-100 Cost of per unit of input Input Total Direct materials $ - Outer casing $50.00 1.0 50.00 - Circuitry boad $45.00 1.0 45.00 - Packaging kit $5.00 1.0 5.00 Direct mfg. labor $80.00 1.5 120.00 Variable mfg O/H $20.00 1.5 30.00 Fixed mfg O/H $8.00 1.5 12.00 You are also thinking to use the quarterly management report and variance analysis preparation as an example to provide training to Eric. Before starting to prepare reports, Eric finds out the following additional information about the operations in Q1. Operating data in relation to Q1 actual performance Unit sold 95,000 units Outer casing Circuitry board Packaging kit Direct mfg. labour Used in production 104,500 units 95,000 sets 95,000 sets 152,000 labour hours Amount $5,016,000.00 $4,370,000.00 $475,000.00 $ 11,552,000.00 Static Budget Budgeted Income Statement for EdTech for the Q1 2022 Revenues (90,000 units) Varaible costs Actual Result Budgeted Income Statement for EdTech for the Q1 2022 $27,000,000 Revenues Varaible costs $27,550,000 Direct materials 9,000,000 Direct materials 9,861,000 Direct mfg. labour 10,800,000 Direct mfg. labour 11,552,000 Variable Mfg overhead 2,700,000 Variable Mfg O/H 2,945,000 Variable Sales comission(2% 540,000 Variable Sales comission (2% 551,000 Total variable costs 23,040,000 Total variable costs 24,909,000 Contribution margins 3,960,000 Contribution margins 2,641,000 Fixed manufacturing costs 1,080,000 Fixed manufacturing costs 1,150,000 Fixed non-manuf. costs 500,000 Operating income 1,580,000 Fixed non-manuf. costs 2,380,000 Operating income 500,000 1,650,000 991,000 Note: Eric reorganized and presented the reports under variable costing for both reports, so that change of inventories is not to consider in the analysis. In order to save your time to prepare variance analysis report, Eric sorts out and summarizes necessary budget standard and data for your ready use. Task 3: You and Eric work together to finish the following tasks in Q1. 1. Static-budget variance for operating income. 2. Prepare a flexible budget for operating income 3. Flexible budget variance analysis 4. Sales-volume variance for operating income 5. Price and usage variances for direct materials 6. Price and efficiency variances for direct manufacturing labour. 7. Variable manufacturing overhead spending variance 8. Variable manufacturing overhead efficiency variance 9. Fixed manufacturing overhead spending variance

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