Using Flexible Budgets

The following summary data are from a performance report for Hyland Company for May, during which $9,600$ units were produced. The budget reflects the company's normal capacity of $10,000$ units.

$\backslash$table$[[,$Actual Cost $9,600,$Budget $10,000,$Variances$],[$units$,$units,$$,$Type$],[$Direct material,$$102,600,$$$105,000,$$$(2,400),$Favorable$],[$Direct labor,$207,900,210,000,(2,100),$Favorable$],[$Variable overhead,$73,800,72,000,1,800,$Unfavorable$],[$Fixed overhead,$54,300,54,000,300,$Unfavorable$],[$Total$,$$$438,600,$$$441,000,$$$(2,400),$Favorable$]]$

a$.$ Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar.

$\backslash$table$[[,\backslash$table$[[$Actual$],[$Costs$]],\backslash$table$[[$Flexible$],[$Budget$]],$$$,$Variance,Type,$],[$Direct material,$$,102,600,$$$,92,100,$$$,,2,400\backslash$times $,$Unfavorable,$],[$Direct labor,,$207,900$ V$,,199,584$ x$,,,8,316,$Unfavorable,$],[$Variable overhead,,$73,800$ V$,,201,600$ x$,,,8,400,$Unfavorable,$],[$Fixed overhead,,$54,300,,50,274$ x$,,,4,026\backslash$times $,$Unfavorable,$$v$],[$Totals$,$$$,438,600,$$$,543,558,$$$,,23,142,,]]$

b$.$ Which of the two performance reports should Hyland Company management use to measure the company's operating efficiency in May?

The performance report that compares actual costs to flexible budget costs.