Connor Company's budgeted costs for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per computer case are $40, $8 and $12 respectively. The president is pleased with the following performance report:

Actual Costs Static Budget Variance

Direct Materials $364,000 $400,000 $36,000 F

Direct Manufacturing Labor 78,000 80,000 2,000 F

Direct Marketing (distribution) Labor 110,000 120,000 10,000 F

Actual output was 8,800 cases. Assume all three cost items are variable.Is the president's pleasure justified?Prepare a revised flexible budget for 8,000, 8,800 and 10,000 cases using the framework posted on Canvas. Fixed Costs are budgeted to be $100,000 and actual Fixed Costs are $103,000.

Framework:

Resource Per Unit costs 8,000 8,800 10,000 Actual Costs