7-17 Flexible budget. Connor Company's budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attach case are $40, $8, and $12, respectively. The president is pleased with the following performance report: Static Budget Variance Actual Costs 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 8,800 attach cases. Assume all three direct-cost items shown are variable costs.