The following summary data are from a performance report for Hyland Company for June, during which 9,600 units were produced. The budget reflects the company’s normal capacity of 10,000 units.

a. What is the general implication of the performance report? Why might Hyland question the significance of the report?

b. Revise the performance report using flexible budgeting and comment on the general implication of the revised report.

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Direct material Direct labor. Variable overhead. Fixed overhead.. Total.... Budget (10,000 Units) Actual Costs (9,600 Units) Variances $105,000 $102,600 $2,400 F 210,000 207,900 2,100 F 72,000 73,800 1,800 U 54,000 54,300 300 U $441,000 $438,600 $2,400 F