Barnes Entertainment Corporation prepared a master budget for the month of November that was based on sales of 150,000 board games. The budgeted income statement for the period is as follows.

During November, Barnes produced and sold 180,000 board games. Actual results for the month are as follows.

Required
a. Prepare a flexible budget for November.
b. Calculate Barnes’s static budget variance for November.
c. Will the static budget variance that you calculated in part (b) be useful to management?
Why or why not?
d. Based on the available information, prepare a performance report for management.
e. Comment on the results of yourreport.

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$2,400,000 Sales Revenue Variable expenses Direct materials Direct labor Variable overhead $675,000 300,000 450,000 Total variable expenses Contribution margin Fixed Expenses 1,425,000 975,000 Fixed overhead Fixed selling and administrative expenses 250,000 500,000 Total fixed expenses Operating income 750,000 S 225,000 Sales Revenue Variable expenses $2,870,000 Direct materials Direct labor Variable overhead $798,000 375,000 550,000 Total variable expenses Contribution margin Fixed Expenses 1.723,000 1,147,000 Fixed overhead Fixed selling and administrative expenses 270,000 500,000 Total fixed expenses Operating income 770,000 $ 377,000