7-22 Flexible budget. L'Accessorio, an Italian manufacturer of leather belts, budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per luxury belt41, 5, and 11, respectively. The president is pleased with the following performance report: Variance Actual Costs 373,500 48,600 Static Budget 410,000 36,500 F 50,000 1,400 F Direct materials Direct manufacturing labor Direct marketing (distribution) labor 103,500 110,000 6,500 F Actual output was 9,000 luxury wallets. Assume all three direct-cost items shown are variable costs. Required Is the president's optimism justified? Prepare a revised performance report that uses a flexible budget and a static budget