Refer to the information in Problem 24-3A. Pebco Companys actual income statement for 2011 follows. Required 1. Prepare a flexible budget performance report for 2011.

Refer to the information in Problem 24-3A. Pebco Company’s actual income statement for 2011 follows.

Required
1. Prepare a flexible budget performance report for 2011.
Analysis Component
2. Analyze and interpret both the
(a) Sales variance and
(b) Direct materialsvariance.

PEBCO COMPANY Statement of Income from Operations For Year Ended December 31,201I Sales (24,000 units) Cost of goods sold $3,648,000 Direct materials.. Direct labor.. Machinery repairs (variable cost).. $1.400,000 360,000 60,000 250,000 218.000 nt equipment Utilities (fixed cost is $154,000) 55,000 2443,000 1,205,000 Gross proft 90,000 24,000 62,000 Shipping^...4....-. Sales salary (annual) Advertising expense Entertainment expense 376,000 General and administrative expenses 104,000 232.000 00,000 436,000 $393,000 Income from operations