Advertising (20% of sales) Travel (10% of sales) 300,000 150,000 675,000 350,000 175,000 790,000 50,000 25,000 115,000 U U Fixed costs: Sales salaries Administrative salaries 15,000 U 120,000 135,000 75,000 75,000 195,000 210,000 $ 870,000 $ 1,000,000 $ Total costs 15,000 130,000 U U Flexible Budget (Actual sales 12,000 units) Budget Actual Variance Sales $ 1,800,000 $ 1,800,000 $ Variable costs: Commissions (15% of sales) 270,000 265,000 5,000 F Advertising (20% of sales) 360,000 350,000 10,000 F Travel (10% of sales) 180,000 175,000 5,000 FI 810,000 790,000 20,000 FI Fixed costs: Sales salaries 120,000 135,000 15,000 U Administrative salaries 75,000 75,000 195,000 210,000 15,000 U Total costs $ 1,005,000 $ 1,000,000 $ 5,000 F Required: Assuming the sales manager has control over sales and selling costs, and in your own Jords: a) Explain the difference between static and flexible budgets, and why flexible budgets are useful. (3 marks) b) Comment on the manager's performance