 In this presentation, we will take a look at the benefits of a flexible budget as compared to a fixed or static budget. Last time we took a look at the fixed or static budget and we compared the budget that we had to the actual numbers and then the variance or difference between them. And we determined that we had a favorable difference for the sales. We had a favorable difference for the net income and an unfavorable difference for many of the expenses. And that is what we would expect if we had a situation where the budget was based on a lower number of units, 10,000 in this case versus the actual number that was actually produced, 12,000. And that means that although we have a favorable difference in terms of sales and net income and an unfavorable difference in terms of the expenses, that is what we would expect given the fact that we had the higher production level, which is in essence a good thing. But these unfavorable differences don't really give us enough for us to go in and improve with. It's not enough information for us to go in and make decisions on how we can better our expenses or control our expenses better or budget better. And so in order for us to do that, we can take this information, break it out into a budgeted or a flexible type of budget. And then we can make this comparison based on 12,000 units, meaning we can adjust our budget as if it wasn't based on the 10,000, but 12,000 and therefore compare the budget to actual both being based on the same number of units being produced 12,000 and then look at our variances, which would be comparing the same thing, the same thing, apples to apples as they say, and give us some more information that we can then further possibly break down and make decisions on. To do that, we're going to take our standard type of income statement and break it out into a contribution margin type of income statement. So you see we have here the standard sales cost of goods sold is broken out by a category of what the expenses do for us, as opposed to the behavior of the expenses, the fixed and variable. So we're going to come up to a budgeted income statement that will be a contribution margin same bottom line 7,900, however, it'll be in a format of behavior.