Flexible budget. The budgeted prices for direct materials, direct manufacturing labour, and direct marketing (distribution) labour per attache case are $48, $9.60, and $14.40 respectively. The president is pleased with the following performance report:

Actual Costs Static Budget Variance Direct materials $436,800 $480,000 $43,200 F Direct manufacturing labour 93,600 96,000 2,400 F Direct marketing (distribution) labour 132,000 144,000 12,000 F Required Actual output was 8,800 attache cases. Is the president’s pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget. Assume all three directcost items are variable costs.