1. The static (master) budget of Parcel, Inc., called for a production and sales volume of 25,000 units. At that volume, total budgeted fixed costs were $150,000 and total budgeted variable costs were $200,000. Prepare a flexible budget for an expected volume of 26,000 units.
2. Scott Company’s master budget called for a planned sales volume of 30,000 units. Budgeted direct materials cost was $4 per unit. Scott actually produced and sold 32,000 units with an actual materials cost of $3.90 per unit. Determine the volume variance for materials cost and identify the organizational unit most likely responsible for this variance. Determine the flexible budget variance for materials cost and identify the organizational unit most likely responsible for this variance.