$\backslash$table$[[,$LAWNMATE COMPANY perating Results For the Month of May,,$],[,$Master Budget,Actual,Varlance$],[$Units sold,$5,000,4,800,200$ U$],[$Revenue$,$$$1,200,000,$$$1,152,000,$$$48,000$ U$],[$Variable cost$,760,000,780,000,20,000$ U$],[$Contribution margin,$ $440,000,$$ $372,000,$$$68,000$ U$],[$Fixed production overhead,$180,000,180,000,],[$Fixed general and administrative cost,$120,000,115,000,5,000$ F$],[$Operating income,$$140,000,$$ $77,000,$$$63,000$ U$]]$

When the master budget was prepared, LawnMate's cost accountant, Joan Ballard, supplied the following unit costs: direct material, $$60$; direct labor, $$44$; variable production overhead, $$36$; and variable selling expenses, $$12.$

The total variable costs of $$780,000$ for May include $$320,000$ for direct material, $$192,000$ for direct labor, $$176,000$ for variable production overhead, and $$92,000$ for variable selling expenses. Ballard believes that LawnMate's monthly reports would be more meaningful to everyone if the company adopted flexible budgeting and prepared more detailed analyses.

Required:

Prepare a flexible budget for LawnMate Company for the month of May that includes separate variable$-$cost budgets for each type of cost $($direct material, etc.$).$

Determine the variance between the flexible budget and actual cost for each cost item.

Discuss how the revised budget and variance data are likely to impact the behavior of Halima Richmond, the production manager.

Build a spreadsheet: Construct an Excel spreadsheet to solve requirements $1$ and $2$ above. Show how the solution will change if the following information changes: actual sales amounted to $4,700$ units, and actual fixed overhead was $$179,000.$