E10-2A

Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 9,600 units were produced. The budget reflects the company's normal capacity of 10,000 units. a. What is the general implication of the performance report? Why might Sterling question the significance of the report? b. Revise the performance report using flexible budgeting, and comment on the general implication of the revised report