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

Harvin Company’s budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attaché case are $ 37, $ 9, and $ 13, respectively. The president is pleased with the following performance report:

Actual output was 9,800 attaché cases. Assume all three direct- cost items shown are variable costs.

Required
Is the president’s pleasure justified? Prepare a revised performance report that uses a flexible budget and a staticbudget.

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Direct materials Direct manufacturing labor Direct marketing (distribution) labor Actual Costs $373,000 97.200 133,000 Static Budget $407,000 99,000 143,000 Variance $34,000 F 1,800 F 10,000 F