ReelTime distributes DVDs to movie retailers. ReelTime's top management meets monthly to evaluate the company's performance. Controller Jairo Munoz prepared the following performance report for the meeting.

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

Management is disappointed by the operating income results. CEO Philippe Gollin exclaims, "How can actual operating income be roughly 13% of the static budget amount when there are so many favourable variances?"

Requirements

Prepare a more informative performance report. Be sure to include a flexible budget for the actual number of DVDs bought and sold.

As a member of ReelTime's management team, which variances would you want investigate