check the partial answers and solve question 2 and 4 and 6 Craft Inc. Budgeted Contribution Income Statement For Month of October Sales $169,312 Less Variable costs Variable cost of goods sold: Direct materials $35,002 Direct labor 14,652 Manufacturing overhead 10,582 $60,236 Selling and distribution 22,792 (83,028) Contribution Margin 86,284 Less Fixed Costs: Manufacturing overhead 40,000 Selling and Distribution 30,000 (70,000) Net Income(Loss) 16,284 Craft Inc. Actual Contribution Income Statement For Month of October Sales $230,000 Less Variable costs Variable cost of goods sold: Direct materials $40,000 Direct labor 15,000 Manufacturing overhead 13,500 $68,500 Selling and distribution 38,000 (106,500) Contribution Margin 123,500 Less Fixed Costs: Manufacturing overhead 39,000 Selling and Distribution 31,000 (70,000) Net Income(Loss) 53,500 Required: 1. Prepare a flexible budget performance report for Production that compares actual and allowed costs. 2. Prepare a flexible budget performance report for selling and distribution that compares actual and allowed costs. 3. Determine the revenue variance. 4. Determine the sales price variance. 5. Determine the sales volume variance. 6. Explain to management the areas that should be investigated. Explain why you picked these areas to look at. 1. Prepare a flexible budget performance report for Production that compares actual and allowed costs. Production Department Flexible Budget Performance Report For Month of October Actual costs Flexible Budget Cost Flexible Budget Variances Designation U or F Units 810 units 810 units Direct Materials $40,000 $35,002 $4,998 U Direct Labor 14,580 14,652 72 F Variable Manufacturing overhead 10,530 10,582 52 F Fixed Manufacturing 40,000 40,000 - - Total $105,110 $100,236 $5,122 2. Prepare a flexible budget performance report for selling and distribution that compares actual and allowed costs. Selling and Distribution Cost Center Flexible Budget Performance Report For Month of October Actual costs Flexible Budget Cost Flexible Budget Variances Designation U or F Units 38,000 22,792 15,208 U Selling and Distribution: Variable $30,000 F Fixed 31,000 Total 3. Determine the revenue variance. $60,688 U Revenue variance= Actual Sales - Flexible Budget Sales 4. Determine the sales price variance. 5. Determine the sales volume variance. $832 F Sales Volume Variance = (Actual Units Sold - Budgeted Units) x Budgeted Sales Price 6. Explain to management the areas that should be investigated. Explain why you picked these areas and your response must include details of the specifics of these variances