Exercise 15-10 Evaluating a cost center including flexible budgeting concepts LO 15-3, 15-4, 15-5 Koch Medical Equipment Company makes a blood pressure measuring kit. Albert Kaiser is the production manager. The production departments static budget and actual results for 2015 follow. Static Budget Actual Results Production in units 33,000 kits 34,300 kits Direct materials $ 250,800 $ 299,580 Direct labor 217,800 219,480 Variable manufacturing overhead 49,500 54,350 Total variable costs 518,100 573,410 Fixed manufacturing overhead 213,000 208,000 Total manufacturing cost $ 731,100 $ 781,410 Required a. Convert the static budget into a flexible budget. (Do not round intermediate calculations.)

	flexible budget
production in units	34,3000	kits
direct materials
direct labor
variable manufacturing overhead
total variable costs
fixed manufacturing overhead
total manufacturing costs

b. Calculate variances and indicate the effect of each variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

	variance	Choose which one F= for favorable, or U=unfavorable or None
direct material
direct labor
variable maufacturing overhead
total variable costs
fixed manufacturing overhead
total manufacturing costs

References WorksheetExercise 15-10 Evaluating a cost center including flexible budgeting concepts LO 15-3, 15-4, 15-5