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 Costs Static Budget Variance Direct materials $364,000 $400,000 $36,000 F Direct manufacturing labor 78,000 80,000 2,000 F Direct marketing (distribution) labor 110,000 120,000 10,000 F Actual output was 8 comma 800 attaché cases. Assume all three direct-cost items above are variable costs. Requirement Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.
