Relaxing Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Relaxing allocates overhead based on yards of direct materials. The company's performance report includes the following selected data:

Requirements
1. Prepare a flexible budget based on the actual number of recliners sold.
2. Compute the price variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead spending, variable overhead efficiency, fixed overhead spending, and fixed overhead volume variances.
3. Have Relaxing's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why?
4. Describe how Relaxing's managers can benefit from the standard costingsystem.

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Actual Results Static Budget (975 reclincrs) (955 rcclincrs) Sales (975 recliners x $505) 492,375 (955 recliners x $485) 463,175 Variable manufacturing costs: Direct materials (5,850 yds @ $8.90/yard) (6,000 yds @ $8.70yard) 52,065 52,200 Direct labor (9,750 hrs @ $9.00/hour) 87,750 (9,350 hrs @ $9.10/hour) 85,085 Variable overhead (5,850 yds @ $5.30/yard) (6,000 yds @ $6.70/yard) 31,005 40,200 Fixed manufacturing costs: Fixed overhcad 60,255 62,255 231,075 $ Total cost of goods sold 239,740 Gross profit 261,300 $ 223,435