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The cost accountant for Shermans Co. prepared the following monthly performance report relating to the Production Department.

Budgeted Actual

Production Production

(10,000 Units) (11,000 Units)

Direct materials used...................................................... $240,000 $260,000

Direct labor ................................................................ $100,000 $101,000

Variable manufacturing overhead.................................... $60,000 $65,000

Fixed manufacturing overhead........................................ $160,000 $164,000

1. Refer to the above data. Compute the amounts that should be included for each of the following in a flexible budget prepared at an 11,000-unit level of production:

a Direct materials: $____________

a Direct labor: $____________

b Fixed manufacturing overhead: $____________

1. Refer to the above data. Assume that a revised performance report is prepared for the 11,000unit level of production using a flexible budget approach. Compute the cost variances for each of the following. Indicate whether each variance is favorable (F) or unfavorable (U).

a Direct materials variance from flexible budget: $____________

b Direct labor variance from flexible budget: $____________

c Total manufacturing overhead variance from flexible budget: $____________

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