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

Actual output was 8,800 attach? 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 static budget.

Direct materials Direct manufacturing labor Direct marketing (distribution) labor Actual Costs $364,000 78,000 110,000 Static Budget $400,000 80,000 120,000 Variance $36,000 F 2,000 F 10,000 F