A desperate Billy Bob Thornton has restarted his "Hire-a-Santa" service in order to generate income. In preparing his annual budget, he assumes he will earn $125,000 in revenue, while incurring direct labor costs of $3,750 to pay his elves and a fixed cost of $785 for a Santa suit. However, Christmas spirit turned out to be high and Billy Bob actually earned $180,000 in revenue, while incurring $4,150 in direct labor costs and $960 for the Santa Suit. If Mr. Thornton uses sales revenue as the activity level for his flexible budgets, what should the flexible budget report as the variance between expected costs and actual costs? O $1,075 Favorable O $175 Unfavorable O $1,250 Favorable O $575 Unfavorable O None of the above