Santini Corporation's budget for the first quarter of the year includes the following: Planned Unit Sales 10.000 Sales $1,000,000 Fixed manufacturing costs: Salaries $95,000 Utilities 7,500 Factory Rent 45,000 Maintenance/other 2.500 Total fixed manufacturing costs $157,000 Variable manufacturing costs: Direct materials $300,000 Direct labor 250,000 Other 100,000 Total variable manufacturing costs $650,000 Actual results for the first quarter were as follows: Actual Unit Sales 8.000 ********* ***** Sales $800,000 Fixed manufacturing costs: Salaries $95,000 Utilities 7,500 Factory Rent 45,000 Maintenance/other 2.500 Total fixed manufacturing costs $157,000 Variable manufacturing costs: Direct materials $250,000 Direct labor 232,500 Other 95,000 Total variable manufacturing costs $577,500 The plant manager believes he is due a bonus, as actual variable manufacturing costs were much lower than the budget. Required: 1. Prepare a flexible budget report for sales at actual levels. 2. Respond to the plant manager's request in a memo