can Small TIRST ning Objectives 1, 3, 4 P8-26A Preparing a flexible budget computing standard cost yari Kyler Recliners manufactures leather recliners and uses flexible standard cost system. Kyler allocates overhead based on yards of mpany's performance report includes the following selected da es flexible budgeting and a vards of direct materials 2. VOH Eff. Var $1,377 U Static Budget (1,025 recliners) Actual Re (1,005 redli 11.005 recliners) Sales (1,025 recliners X $495 each) (1,005 recliners x $485 each) $ 507,375 $ 487,425 54,735 54,810 92,250 Variable Manufacturing Costs: Direct Materials (6,150 yds @ $8.90/yd.) (6,300 yds @ $8.70/yd.) Direct Labor (10,250 DLHr @ $9.00/DLH) (9,850 DLHr @ $9.10/DLHr) Variable Overhead (6,150 yds @ $5.10/yd.) (6,300 yds @ $6.50/yd.) Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold Gross Profit 89,635 31,365 40,950 62,730 241,080 $ 266,295 64,730 250,125 $ 237,300 Flexible Budge Requirements 1. Prepare a flexible budget based on the actual number of recliners sold. 2. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Round to the nearest dollar 3. Have Kyler's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? 4. Describe how Kyler's managers can benefit from the standard cost system