1. Puzzled Ltd produces and sells 3-D puzzles. At the beginning of Year 3, the company projected production and sales to be 100,000 3-D puzzles. The budgeted unit selling price, unit variable costs, and fixed costs for Year 3 were as follows. Selling price per unit $ 19.00 Projected Unit Costs Direct materials $ 3.00 Direct labor $ 2.00 Variable MOH $ 1.00 Fixed MOH $ 2.80 Variable Sell & Admin $ 1.50 Fixed Sell & Admin $ 4.00 Actual results for Year 3 are presented below. Sold 90,000 3-D puzzles $ 1,710,000 Actual Total Costs Direct materials $ 279,000 Direct labor $ 180,000 Variable MOH $ 94,500 Fixed MOH $ 205,500 Variable Sell & Admin $ 180,000 Fixed Sell & Admin $ 405,000.
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3. Required For Puzzled Ltd, 
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5. a) Prepare the projected Master Budget Income Statement for Year 3 in the Contribution Margin format and in the Gross Margin format. 
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7. b) Prepare the actual Income Statement for Year 3 in the Contribution Margin format and in the Gross Margin format. 
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9. c) Prepare the Flexible Budget Income Statement for Year 3 in the Contribution Margin format and in the Gross Margin format. 
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11. d) Calculate the static budget variances, the sales volume variances, and the flexible budget variances for Year 3. Explain why fixed costs are the same in Master/Static Budget and in Flexible Budget. 
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13. e) Explain the meaning of each variance.