ABC Corp produces alphabet flash cards for grammar schools. They forecast that

ABC Corp produces alphabet flash cards for grammar
schools. They forecast that they will need to produce 90000 sets of
cards for the 2006-2007 school year.
They budget they following costs for each set of
cards

Materials (1/2 pounds cardboard @ $1.5 per pound) | $.75
Labor (1/4 hour @ $10 per hour) | $2.50
Variable overheads (1/4 hour @ $5 per hour) | $1.25
Fixed Overhead | $21000

Actual results for the academic year were:

Production | 80000 sets of cards

Materials purchased and used | 38000 pounds @ 1.3 per pound

Actual Labor | 23000 hours costing $245000

Actual Variable Overhead| $130000

Actual Fixed Overhead | $2200

1. Prepare an analysis that shows the Volume
Variance and Flex Variance using per unit costs and a static budget a
flexible budget and actual costs

2. Compute Material Price and Quantity Variances

3. Compute the Labor Rate and Efficiency Variance