Assume that owners decided to go ahead with the Canmore expansion (first introduced in question 4). The junior accountant has prepared the following report to compare the static budget (from question 4) to the actual results. The owners have asked you to complete a variance analysis. Required: Part A (4 marks)- Create a Static Budget Report Variance Analysis, indicating whether variances are favorable (F) or unfavorable (U). All variance amounts should be shown as positive numbers. Static Budget Actual Amount Results 4,080 4.790 $ 510 000 $ 574 800 Variance Favorable or Amount Unfavorable 710 Favorable 64,800 Favorable Sales in Units Sales Less: Variable Costs o Cost of Goods Sold 1 Sales Commissions 32 Total Variable Costs 13 Contribution Margin 14 Less: Fixed Costs: 15 Total Fixed Costs 16 Net Operating Income 217,000 76,500 293,500 216,500 218,000 57 480 275 480 299,320 1.000 Unfavorable 19,020 Favorable 18,020 Favorable 82 820 Favorable 192,000 24,500 197 000 102,320 5,000 Unfavorable 77 820 Favorable 17 formance? 12 marks) Required: Part B (6 marks) - The owners can see that the company sold a different amount of units than budgeted. They have asked you to create a flexible budget report. Flexible Budget Amount Favorable (F) or Unfavorable (U) Actual Variance Results Amount 4,790 574,800 Sales in Units Sales Less: Variable Costs: Cost of Goods Sold Sales Commissions Total Variable Costs Contribution Margin Less: Fixed Costs -Net Operating Income 218,000 57480 275 480 299,320 197,000 102,320 Management was pleased on the results based on the static budget report. Should they be pleased? What does the flexible budget tell you? What are your recommendations to management based on the flexible budget report