5. Malden Outdoor Products Inc. produces a number of products, including handmade large fiberglass planters for outdoor displays. The firm, which began operations at the beginning of the current year, uses a standard cost system. The standard costs for one large planter are provided below: Direct material (3 lbs. @ $8.00)$ 24.00Direct labor (2 hrs. @ $15.00) 30.00Variable overhead 24.00Fixed overhead 6.00Standard cost per unit $84.00 The $6.00 fixed overhead rate is based on total budgeted fixed overhead costs of $18,000 and estimated sales of 3,000 units. There were no changes in any inventory account during the period. The company produced and sold 3,100 units at the following costs:Direct materials (9,000 lbs.) $ 81,270Direct labor (6,000 hrs.) 78,000Variable overhead 76,000Fixed overhead 16,500Total production costs incurred$251,770RequiredPrepare a flexible budget to evaluate the current year performance and compute the flexible budget variances.[15 points]
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