19 Static vs flexible budgets The static budget for Study Mate Publishers was estimated sales revenue of $20000000 on sales of 330000 units. The variable production costs (cost of goods sold) were estimated at $8250 000, or $25 per unit sold. Actual results for the company exceeded expectations, with revenue of over $22000000 on sales of 360 000 units. However, the production manager was disappointed to see that the actual variable production costs of $8800 000 exceeded the costs in the static budget by $550 000. The production manager did not understand why his costs were so much higher than the budgeted amount. If anything, he thought that his division had been very efficient and that costs should have been lower than reflected in the budget. REQUIRED Explain why the production manager's actual costs exceeded the amount estimated in the static budget. Should the production division be disappointed with the results