Genco Corporation prepared a budget last period that called for sales of 30,000 units at a price of $20 each. The production costs per unit were estimated to amount to $12.00 variable and $5.00 fixed. Selling and administrative costs were all fixed at $30,000. During the period, production was exactly equal to the actual sales volume of 28,000 units. The actual selling price was $19 per unit. Actual variable costs were $9 per unit and actual fixed production costs totaled $155,000. Selling

and administrative costs were $35,000.

Required:

a) Prepare operating statements for the actual output, as well as a static budget and flexible budget.

b) Explain what is indicated when comparing the operating statements.