Stuart medical equipment company makes a blood pressure measuring kit. jason mccoy is the production manager. the production department’s static budget and actual results for 2019 follow: static budget actual results production in units 35,000 kits 37,900 kits direct materials $ 262,500 $ 321,650 direct labor 227,500 239,750 variable manufacturing overhead 52,500 60,550 total variable costs 542,500 621,950 fixed manufacturing overhead 213,000 208,100 total manufacturing cost $ 755,500 $ 830,050 required a. convert the static budget into a flexible budget. b. calculate the variances.

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?