This continues the Piedmont Computer Company situation from Chapter 22. Assume Piedmont Computer Company has created a standard cost card for the PCC model tablet computer, with overhead allocated based on direct labor hours:

Direct materials ...................................... $ 300 per tablet

Direct labor ..................... 3 hours per tablet at $26 per hour

Variable overhead .............. 3 hours per tablet at $5 per hour

Fixed overhead ................................. $54,000 per month

During the month of September, Piedmont Computer Company incurred the following costs while manufacturing 1,100 PCC model tablets:

Direct materials .................... $ 341,000

Direct labor ............................ 88,000

Variable overhead .................... 17,600

Fixed overhead ...................... 56,320

Requirements

1. Prepare a flexible budget for September for 900, 1,000, and 1,100 PCC model tablets. The tablet has a standard sales price of $675. List variable costs separately.

2. Using 1,000 PCC model tablets for the static budget, prepare a flexible budget performance report for September. Total sales revenue for the month was $767,800. The company sold 1,100 tablets.

3. What insights can the management of Piedmont Computer Company draw from the performance report?