The following static and flexible budget report was prepared for the sales manager of Dreamy Sleep Ltd for the fourth quarter of 2020: Static Budget (20,000 units) Budget Actual Variance $ 500,000 $ 550,000 $ 50,000 Sales Variable costs: Commisions (15% of sales) Advertising (20% of sales) Travel (10% of sales) U U 75,000 100,000 50,000 225,000 80,000 105,000 55,000 240,000 5,000 5,000 5,000 15,000 U U Fixed costs: Sales salaries Administrative salaries 120,000 120,000 75,000 75,000 195,000 195,000 $ 420,000 $435,000 $ Total costs 15,000 Flexible Budget (Actual sales 22,000 units) Budget Actual Variance $ 550,000 $ 550,000 $ Sales Variable costs: Commisions (15% of sales) Advertising (20% of sales) Travel (10% of sales) 2,500 5,000 82,500 110,000 55,000 247,500 80,000 105,000 55,000 240,000 7,500 Fixed costs: Sales salaries Administrative salaries 120,000 75,000 195,000 442,500S 120,000 75,000 195,000 435,000 $ Total costs S 7,500 Required: Assuming the sales manager has control over sales and selling costs, and in your own words: a) Explain the difference between static and flexible budgets, and why flexible budgets are useful. (3 marks) b) Comment on the manager's performance. (3 marks) Paragraph 11 B 1 + ... Answer (part a): Answer (part b)