Bradley Corp. prepared a budget last period that called for sales of 20,000 units at a

price of $25 each. The costs per unit were estimated to amount to $15 variable and $8

fixed.

During the period, actual production and sales were 22,000 units. The actual selling

price was $28 per unit. Variable costs were $16 per unit. Fixed costs actually incurred

were $175,000.

Required:

1. Prepare operating statements for the actual output, as well as a static budget and a flexible budget.
2. Explain what is indicated when comparing the operating statements.