Using Management by Exception, use a 12% benchmark to determine which variances must be investigated.

Units Sales Variable costs Direct labor Direct Material Variable Manufacturing Total variable costs Contribution Margin Fixed costs Manufacturing Selling 8; Admin Total xed costs Operating Revenue Units Sales Variable costs Direct labor Direct Material Variable Manufacturing Total variable costs Contribution Margin Fixed costs Manufacturing Selling & Admin Total xed costs Operating Income Master Budget Actual Amounts Variance 17,500 17,000 500 $259,000 $255,000 4,000 $45,000 $38,000 7,000 $25,000 $25,500 500 $125,000 $129,500 4,500 $195,000 $193,000 2,000 $64,000 $62,000 2,000 $20,250 $20,250 $13,000 $13,000 $33,250 $33,250 $30,750 $28,750 2,000 Budget Formula Flexible Budget Actual Variance F alenfav % Diff Investigate? 17,000 17,000 $255,000 $255,000 $2.57 $43,714 $38,000 5,714 $1.43 $24,286 $25,500 1,214 $7.14 $121,429 $129,500 8,071 $189,429 $193,000 3,571 $65,571 $62,000 3,571 $20,250 $20,250 $13,000 $13,000 $33,250 $33,250 $32,321 $28,750 3,571