A condensed income statement for Inman Company is as follows for the month of November:

Further analysis revealed the following data on costs:

Required:
a. Prepare a report comparing the master budget with a flexible budget for November.
b. Calculate the following variances:
(1) Sales volume.
(2) Unit margin.
(3) Direct materials (net).
(4) Direct labor (net).
(5) Manufacturing overhead (net).
(6) Selling and administrative (net).
c. Prepare a variance report that accounts for the difference between budgeted and actual operating income for Inman in November.
d. Comment on the significance of the variances you calculated.

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Master Budget 20,000 $400,000 Actual Variance Units produced and sold Sales revenue Costs: 19,000(1,000) $361,000 $(39,000) Direct materials Direct labor Manufacturing overhead Selling and administration 60,000 60,000 130,000 100,000 350,000 $ 50,000 18,000 (16,000) 42,000 76,000 99,000 14,000 130,000 -1,000 3,000 5(36,000) Total costs 347,000 Operating income "(, " unfavocable Variable Rate per Unit Fixed Direct materials Direct labor Manufacturing overhead Selling and administration 4 2 $12 s 50,000 60,000 $110,000 Totals