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Competition is forcing us to cut prices in order to remain competitive. Actual sales were 80,000 units compared with the master budget sales of…

Competition is forcing us to cut prices in order to remain competitive. Actual sales were 80,000 units compared with the master budget sales of 100,000 units. Table is below.

Q1) Explain why we cannot conclude that good cost control has kept overall variable manufacturing cost performance below master budget targets without conducting further analyses?

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Q2) What is the manufacturing cost variance for variable manufacturing costs? Is it favorable or unfavorable?

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