The budgeted costs for Connor Company for direct materials, direct production labor and direct distribution labor are $40, $8 and $12, respectively. The vice-president is deeply satisfied with the following performance report: Direct Materials Direct Labor Production Real Costs Master Static Budget Variation $364,000 $400,000 78,000 80,000 Direct Labor Distribution 110,00 Real number of units produced: 8,000 120,000 $36,000 F 2,000 F 10,000 F a. Prepare a performance evaluation report that uses a flexible and a static budget. Please assume that all the costs are variable. (The variance analysis detail is not required for this question). b. Is the vice-president's satisfaction justified?