Connor Company۪s budgeted prices for direct materials, direct manufacturing labour, and direct marketing (distribution) labour per attach̩ case are $40, $8, and $12, respectively. The president is pleased with the following performance report:

Actual output was 8,800 attaché cases. Assume all three direct cost items above are variable costs.
REQUIRED
Is the president€™s pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.

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Actual Costs Static Budget Variance Direct materials Direct manufacturing labour Direct marketing (distribution) labour S364,000 78,000 110,000 S400,000 80,000 120,000 s36 2,000 F 10,000 F