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Stardust manufactures plastic chairs. Information related to the sale and production during the month of Mar follows:

$\backslash$table$[[$Actual$,$Flexible$],[$Budget$,]]$

Units sold

$5,600,5,600,5,000$

Revenue

$$920,000,$$$840,000,$$$750,000$

Variable costs:

$\backslash$table$[[$Direct material,$325,000,336,000,300,000]]$

$\backslash$table$[[$Direct labor $,145,000,112,000,100,000]]$

Variable manuf. overhead $80,000,84,000,75,000$

$\backslash$table$[[$Total$]]$

Contribution margin $,370,000,308,000,275,000$

$\backslash$table$[[$Fixed costs,$125,000,120,000,120,000]]$

Operating income

$$245,000,$$$188,000,$$$155,000$

Additional direct material information:

Direct materials are budgeted at $15\mathrm{.}0lbs.$ per chair and $$4\mathrm{.}00$ per lb$.$

Actual direct materials used totaled $100,000$ lbs$.$

Additional direct labor information:

Direct labor is budgeted at $1$ hour per chair and a $$20$ hourly rate

Actual labor hours incurred totaled $12,500$ hours

a$.$ In general, describe how a flexible budget is determined?

b$.$ Determine the sales$-$volume variance. What does this variance mean?

c$.$ Determine the direct material price and efficiency variances.

d$.$ Determine the fixed overhead spending variance.

e$.$ What is a possible explanation for the direct material price variance you determined in c$.$ above?

Stardust manufactures plastic chairs. Information related to the sale and production during the month of Mar follows:

$\backslash$table$[[$Actual$,$Flexible$],[$Budget$,]]$

Units sold

$5,600,5,600,5,000$

Revenue

$$920,000,$$$840,000,$$$750,000$

Variable costs:

$\backslash$table$[[$Direct material,$325,000,336,000,300,000],[$Direct labor,$145,000,112,000,100,000]]$

Variable manuf. overhead $,80,000,84,000,75,000$

$\backslash$table$[[$Total$,550,000,532,000]]$

Contribution margin $,370,000,308,000,275,000$

$\backslash$table$[[$Fixed costs,$125,000,120,000,120,000]]$

Operating income

$$245,000,$$$188,000,$$$155,000$

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