8-27 Basic Flexible Budget The budgeted prices for materials and direct labor per unit of finished product are $11 and $5, respec- tively. The production manager is delighted about the following data: Static Budget $77,000 35,000 Actual Costs $72,000 31,000 Variance $5,000 F 4,000 F Direct materials Direct labor lsthe manager's happiness justified? Prepare a report that might provide a more detailed explanation of why the static budget was not achieved. Good output was 5,800 units