Flannery Muffler Shop has budgeted to repair 10,000 mufflers during 2000. Each repair job takes $11 / 2$ hours, and employees are paid $\$ 12$ per hour. During 2000, Flannery actually repaired 9,425 mufflers, and the salary expense amounted to $\$ 179,000$

1. Assuming a static budget, use the information to prepare a performance report for Flannery Muffler Shop for 2000.

2. Assuming a flexible budget, use the information to prepare a performance report for Flannery Muffler Shop for 2000.

3. Interpretive Question: The manager of the muffler shop believes he deserves a bonus because the actual salary expense ( $\$ 179,000$ ) was less than budgeted. Do you agree? Explain.