As sales manager, Hank Short was given the following static budget report for selling expenses in the Winter Sports Department of Jennings Outdoor Company for the month of November.

Jennings Outdoor Company Winter Sports Department Budget Report For the Month Ended November 30, 2020
		Budget		Actual			Difference Favorable F Unfavorable U
Sales in units		4,100		4,500			400	F
Variable expenses
Sales commissions		$114,800		$118,900			$4,100	U
Advertising expense		36,900		38,900			2,000	U
Travel expense		180,400		191,700			11,300	U
Demonstration models given out		110,700		99,600			11,100	F
Total variable		442,800		449,100			6,300	U
Fixed expenses
Rent		8,000		8,000			-0-
Sales salaries		59,600		59,600			-0-
Office salaries		39,900		39,900			-0-
Depreciation vans (sales staff)		2,300		2,700	*		400	U
Total fixed		109,800		110,200			400	U
Total expenses		$552,600		$559,300			$6,700	U

*The increase in depreciation was due to a new vehicle that had to be purchased as a result of an accident driving on snowy roads on the way to visit a customer. As a result of this budget report, Hank was called into the presidents office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Hank knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.

After Hank because familiar with the flexible budget report, he began to analyze the numbers. Hank feels that sales can be increased if Jennings Outdoor Company would increase sales commissions to $29.00 per unit. This would allow them to reduce advertising expense to $8.00 per unit. Hank thinks that these changes will motivate the sales staff to sell at least 5,500units. He is allowed to try his plan in December and had the following results.

Jennings Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020
Sales in units		5,500
Variable expenses
Sales commissions		$152,900
Advertising expense		42,200
Travel expense		234,600
Demonstration models given out		127,000
Total variable		556,700
Fixed expenses
Rent		8,000
Sales salaries		59,600
Office salaries		39,900
Depreciation vans (sales staff)		2,700
Total fixed		110,200
Total expenses		$666,900

Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unit answers to 2 decimal places, e.g. 15.25.)

Jennings Outdoor Company Winter Sports Department Flexible Budget Report December 31, 2020For the Month Ended December 31, 2020For the Year Ended December 31, 2020
								Difference
		Per Unit		Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
		$		$		$		$
		$
				$		$		$

Do you think the new plan is valid? Explain.

It appears that the new plan is a good choicenot a good choice as favorable total variance is lowerhigher by $ than in November.