The budgeted prices for direct materials, direct manufacturing labour and direct marketing (distribution) labour per attach case

The budgeted prices for direct materials, direct manufacturing labour and direct marketing (distribution)

labour per attaché case are €40, €8 and €12, respectively. The chairman is pleased with the following performance report:

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Actual costs Static budget Variance Direct materials 364 000 Direct manufacturing labour 78 000 400 000 80 000 36 000 F 2 000 F Direct marketing (distribution) labour 110 000 120 000 10 000 F Required Actual output was 8800 attach cases. Is the chairman's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget. Assume all three direct costs items are variable costs.