$\backslash$table$[[,$Master Budget,Actual Results,Variances,,$],[$Number of units,$151,200,161,200,10,000,,],[$Sales revenue,$33,264,000,35,786,400,2,522,400,$F$,],[$Variable manufacturing costs,,,,,$],[$Materials$,(4,838,400),(5,040,000),201,600,$U$,],[$Labor$,(4,233,600),(4,433,000),199,400,$U$,],[$Overhead$,(2,116,800),(2,307,000),190,200,$U$,],[\backslash$table$[[$Variable selling, general and administrative$],[$costs$]],(5,292,000),(5,791,000),499,000,$U$,],[$Contribution margin,$16,783,200,18,215,400,1,432,200,$F$,],[$Fixed costs,,,,$-,],[$Manufacturing overhead,$(7,892,640),(7,809,000),(83,640),$F$,],[$Selling$,$ general and administrative costs,$(7,024,000),(7,068,000),44,000,$U$,],[$Net income,$1,866,560,3,338,400,(1,471,840),$F$,]]$

Requirements:

$2.$a$.$ Prepare a flexible budget and recompute the budget variances. $($Show the effect of each variance by putting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no$)$

Hint: To prepare a flexible budget, you will need to calculate the price and standard cost per unit for materials, labor, overhead, and selling and administrative costs.

$2.$b$.$ Are Jack's frustrations justified? why or why not? Explain by discussing at least four of the variances that you calculated in $2.$a$.$

The questions below are general and not tied to the prior case above.

$2.$c$.$ When are sales and cost variances favorable and unfavorable?

$2.$d$.$ When would variable volume variances be expected to be unfavorable? How should unfavorable variable cost volume variances be interpreted?

$2.$e$.$ With respect to fixed costs, what are the consequences of the actual volume and activity exceeding the planned volume?

$2.$f$.$ How can a residual income approach to performance evaluation reduce the likelihood of suboptimization?