Lundell Industries prepared a budget last period that called for sales of 10,000 units at a price of $15 each. The production costs per unit were estimated to amount to $8.00 variable and $5.00 fixed. Selling and administrative costs were all fixed at $40,000. During the period, production was exactly equal to the actual sales volume of 12,000 units. The actual selling price was $14.00 per unit. Actual variable costs were $8.50 per unit and actual fixed production costs totaled $55,000. Selling and administrative costs were $45,000. 

Required: 

a) Show an operating statement for the actual output, as well as a static budget and flexible budget. 

b) What is the purpose of preparing a flexible budget?