The following static and flexible budget report was prepared for the sales manager of ACME Corporation for the first quarter of 2022:

	Static Budget (20,000 units)
	Budget	Actual	Variance
Sales	$ 500,000	$ 475,000	$ 25,000	U
Variable costs:
Commissions (15% of sales)	75,000	75,000	-	-
Advertising (20% of sales)	100,000	100,000	-	-
Travel (10% of sales)	50,000	47,500	2,500	F
	225,000	222,500	2,500	F
Fixed costs:
Sales salaries	120,000	120,000	-	-
Administrative salaries	75,000	75,000	-	-
	195,000	195,000	-	-
Total costs	$ 420,000	$ 417,500	$ 2,500	F

	Flexible Budget (Actual sales 19,000 units)
	Budget	Actual	Variance
Sales	$ 475,000	$ 475,000	$ -	-
Variable costs:
Commissions (15% of sales)	71,250	75,000	3,750	U
Advertising (20% of sales)	95,000	100,000	5,000	U
Travel (10% of sales)	47,500	47,500	-	-
	213,750	222,500	8,750	U
Fixed costs:
Sales salaries	120,000	120,000	-	-
Administrative salaries	75,000	75,000	-	-
	195,000	195,000	-	-
Total costs	$ 408,750	$ 417,500	$ 8,750	U

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 mark)

Answer (part a)

Answer (part b)