(9 pts) 4. Sanchez Corporation manufactures tables for schools. The 2023 operating budget is based on sales of 100,000 units at $500 per table. Budgeted variable costs are $350 per unit, while fixed costs total $6,000,000.

For 2023, actual sales were 110,000 units at $490 each. Actual variable costs were $360 per unit and fixed costs totaled $5,800,000.

Required:

a) Prepare a report showing actual results, a static budget and a flexible budget.

b) Explain the significance of a flexible budget versus a static budget.