Hello! Please provide the necessary report.

Larry Miller, controller for Kipling Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of frozen desserts: Icey and Tasty. The two desserts use common raw materials in different proportions. The company expects to produce 200,000 gallons of each product during the coming year. Icey requires 0.25 direct labor hour per gallon and Tasty requires 0.30. Larry has developed the following fixed and variable costs for each of the four overhead items:

Overhead Item

Fixed Cost

Variable Rate per DLH

Maintenance

$52,000

$1.20

Power

1.50

Indirect labor

79,500

4.80

Rent

54,000

Assume that Kipling actually produced 240,000 gallons of Icey and 200,000 of Tasty. The actual overhead costs incurred were:

Maintenance

$192,000

Power

181,700

Indirect labor

649,500

Rent

54,000

Required:

A. Make a performance report for the period.

B. Based on the report, would you judge any of the variances to be significant? Discuss some possible reasons for the variances.