Recreate static budget; prepare flexible budget

48. Byrd Company is a manufacturer affiliated with the furniture industry. The company produces a wide variety of "hardware" component parts. Product examples include drawer slides, hinges, door pulls and handles, springs, and locks. Dent Tripoli is the company's new chief financial officer. Dent is very concerned with providing the company's president and board of directors with accurate financial reports. He is concerned that the company's use of static budgeting does not convey a fair presentation of the company's performance. The following contribution margin format income statement reports the results of Byrd Company's operations for the last quarter of 2009.

Sales Revenues (400,000 units) $2,440,000
Variable Cost
Manufacturing $1,060,000
Marketing and administrative 748,000 $1,808,000
Contribution margin $632,000
Fixed Costs
Manufacturing $400,000
Marketing and administrative 200,000 600,000
Operating profit $32,000

Byrd's 2009 budgets were based on production and sales of 375,000 units at an average selling price of $6. At that volume, variable manufacturing costs were budgeted to be $2.50 per unit, and variable marketing and administrative costs were budgeted to be $2.00 each. Had the company's actual performance equaled the budgeted performance, Byrd would have reported operating profit of $62,500.

Required

A. Based on the information provided in the problem, recreate Byrd's 2009 static budget. Be sure to include a comparison between the static budget and the actual results for the year.
B. Based on the information provided in the problem, prepare a flexible budget for Byrd for 2009. Be sure to include a comparison between the flexible budget and the actual results that reports the flexible budget variance.
C. Calculate Byrd's sales price variance for 2009. Is the variance favorable or unfavorable?
D. Calculate Byrd's sales volume variance for 2009.