Coola Vents Ltd has prepared a fixed budget performance report for the year ended 30June 2017 as follows:

	Budget				Actual				Variance
Units of production:		72 000				75 200				3 200	F
Factory overhead: Variable costs: Indirect labour Factory supplies Repairs and maintenance	$	108 000 39 600   25 200			$	120 320 41 360   18 800			$	12 320 1 760 6 400	U U F
Total variable overhead		172 800				180 480				7 680	U
Fixed costs: Insurance of factory Occupancy costs Depreciation Supervisory salaries		16 600 24 800 20 700   43 400				24 600 25 400 20 700   42 200				8 000 600 —    1 200	U U F
Total fixed overhead		105 500				112 900				7 400	U
Total factory overhead	$	278 300			$	293 380			$	15 080	U

Required

A. Convert the fixed budget performance report prepared by Coola Vents  Ltd to a flexible budget performance report.

B. Explain why there is no variable overhead in the flexible budget for Coola Vents Ltd. Does this mean that expenditure on variable overhead items is satisfactory?