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Flexible budget

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Flexible budget. L'Accessorio, an Italian manufacturer of leather belts, budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per luxury belt—€41, €5, and €11, respectively. The president is pleased with the following performance report: Variance Actual Costs €373,500 48,600 Static Budget €410,000 €36,500 F 50,000 1,400 F Direct materials Direct manufacturing labor Direct marketing (distribution) labor 103,500 110,000 6,500 F Actual output was 9,000 luxury wallets. Assume all three direct-cost items shown are variable costs. Required Is the president's optimism justified? Prepare a revised performance report that uses a flexible budget and a static budget.