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:

Master Static Real Costs Variation Budget Direct Materials $364,000 $400,000 $36,000 F DL Production 78,000 80,000 2,000 F DL Distribution 110,000 120,000 10,000 F