Determining flexible budget variances Use the standard price and cost data provided in Exercise 8-3A. Assume that the actual sales price is $7.65 per unit and that the actual variable cost is $4.25 per unit. The actual fixed manufacturing cost is $2,500, and the actual selling and administrative costs are $1,025.
Required
a. Determine the flexible budget variances.
b. Classify the variances as favorable (F) or unfavorable (U).
c. Provide another name for the fixed cost flexible budget variances.
d. Comment on the usefulness of the variances with respect to performance evaluation and identify the member(s) of the management team who is (are) most likely to be responsible for these variances.