Connor Companys budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attach

Connor Company’s budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attaché 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 shown are variable costs. Is the president’s pleasure justified? Prepare a revised performance report that uses a flexible budget and a staticbudget.

Transcribed Image Text:

Direct materials Direct manufacturing labor Direct marketing (distribution) labor Actual Costs Static Budget Variance $400,000 36,000F 2,000 F 20,000 10,000 F $364,000 78,000 110,000 80,000