Davids distributes CDs to movie retailers, including online retailers. David's top management meets weekly to evaluate the company's performance. Controller John Brown prepared the following performance report for the meeting:

Davids
Static Budget Performance Report
For the Month Ended March 1, 2000
		Actual Results		Static Budget		Variance (Actual - Static)
Net Sales Revenue		$ 1,640,000		$ 1,960,000		$ 320,000	U
Variable Costs:
Cost of Goods Sold		775,000		980,000		205,000	F
Sales Commissions		77,000		107,800		30,800	F
Shipping Cost		43,000		53,900		10,900	F
Total Variable Costs		895,000		1,141,700		246,700	F
Contribution Margin		745,000		818,300		73,300
Fixed Costs:
Salaries		311,000		300,500		10,500	U
Depreciation		209,000		214,000		5,000	F
Rent		129,000		108,250		20,750	U
Advertising		81,000		68,500		12,500	U
Total Fixed Costs		730,000		691,250		38,750	U
Operating Income		$ 15,000		$ 127,050		$ 112,050	U

Brown also revealed that the actual sale price of $20 per movie was equal to the budgeted sale price and that there were no changes in inventories for the month.

Requirements

1. Complete an informative performance report. Be sure to include a flexible budget for the actual number of CDs bought and sold.