7-23 Flexible-budget preparation and analysis. XYZ Printers, Inc., produces luxury checkbooks with three checks and stubs per page. Each checkbook is designed for an individual customer and is ordered through the customers bank. The companys operating budget for September 2017 included these data:

Number of checkbooks	20,000
Selling price per book	$ 22
Variable cost per book	$ 9
Fixed costs for the month	$150,000

The actual results for September 2017 were as follows:

Number of checkbooks produced and sold	15,000
Average Selling price per book	$ 23
Variable cost per book	$ 8
Fixed costs for the month	$155,000

The executive vice president of the company observed that the operating income for September was much lower than anticipated, despite a higher-than-budgeted selling price and a lower-than-budgeted variable cost per unit. As the companys management accountant, you have been asked to provide explanations for the disappointing September results.

XYZ develops its flexible budget on the basis of budgeted per-output-unit revenue and per-output-unit variable costs without detailed analysis of budgeted inputs.

Required:

1. Prepare a static-budget-based variance analysis of the September performance.

2. Prepare a flexible-budget-based variance analysis of the September performance.

3. Why might XYZ printers find the flexible-budget-based variance analysis more informative than the static-budget-based variance analysis? Explain your answer.

Please write on the computer, not by hand wriring