Rivers Manufacturing Inc. has the following flexible budget formulas and amounts:
Sales...................................................................... $ 20 per unit
Direct materials...................................................... 5 per unit
Direct labor............................................................ 3 per unit
Variable factory overhead...................................... 4 per unit
Variable selling and administrative expense.......... 1 per unit
Fixed factory overhead......................................... $20,000 per month
Fixed selling and administrative expense................ $15,000 per month
Actual results for May for the production and sale of 6,000 units were as follows:
Sales...................................................................... $125,000
Direct materials...................................................... 32,000
Direct labor............................................................ 19,000
Variable factory overhead...................................... 26,500
Variable selling and administrative expense.......... 6,500
Fixed factory overhead........................................... 18,750
Fixed selling and administrative expense............... 14,500
Prepare a performance report for May that includes the identification of the favorable and unfavorable variances.