Metal Products, LLC, manufactures metal beverage containers. The division that manufactures soft-drink beverage cans for the North American market has two plants that operate 24 hours a day, 365 days a year. The plants are evaluated as cost centers. Small tools and supplies are considered variable overhead. Depreciation and rent are considered fixed overhead. For the month, the master budget for a plant and the actual operating results of the two North American plants, East Coast and West Coast, follow.

Required
1. Prepare a performance report for the East Coast plant. Include a flexible budget and variance analysis.
2. Prepare a performance report for the West Coast plant. Include a flexible budget and variance analysis.
3. Compare the two plants, and comment on their performance.
4. Explain why a flexible budget should beprepared.

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Master Budget East Coast Actual West Coast Actual Center costs: Rolled aluminum ($0.01) Lids (50.005) Direct labor ($0.0025) Small tools and supplies ($0.0013) Depreciation and rent Total cost $4,000,000 $3,492,000 1,980,000 864,000 432,000 480,000 $7,248,000 $5,040,000 2,016,000 1,260,000 588,000 480,000 $9,384,000 2,000,000 1,000,000 520,000 80,000$9.38400 $8,000,000 Performance measures: 41,096 47,945 Cans processed per hour Average daily pounds of scrap metal Cans processed (in millions) 45,662 400 360 420