Question 27 (5 points) The following static and flexible budget report was prepared for the sales manager of Big Bob's Bowling Balls Ltd for the first quarter of 2019: Static Budget (10,000 units) Budget Actual Variance $ 1,500,000 $ 1,800,000 $300,000 F Sales Variable costs: Commissions (15% of sales) Advertising (20% of sales) Travel (10% of sales) U U 225,000 300,000 150,000 675,000 265,000 350,000 175,000 790,000 40,000 50,000 25,000 115,000 U U Fixed costs: Sales salaries Administrative salaries U 120,000 135,000 15,000 75,000 75,000 195,000 210,000 15,000 S 870,000 $ 1,000,000 S 130,000 u Total costs Flexible Budget (Actual sales 12,000 units) Budget Actual Variance S 1,800,000 $ 1,800,000 S Sales Flexible Budget (Actual sales 12,000 units) Budget Actual Variance Sales $ 1,800,000 $ 1,800,000 $ Variable costs: Commissions (15% of sales) 270,000 265,000 5,000 F Advertising (20% of sales) 360,000 350,000 10,000 F Travel (10% of sales) 180,000 175,000 5,000 F 810,000 790,000 20,000 F Fixed costs: Sales salaries 120,000 135,000 15,000 U Administrative salaries 75,000 75,000 195,000 210,000 15,000 U Total costs $ 1,005,000 $1,000,000 S 5,000 Required: Assuming the sales manager has control over sales and selling costs, a) Comment on the manager's performance. (3 marks) b) Explain why flexible budgets are useful. (2 marks)