1. Prepare a flexible budget analysis for The Rescuers for the month of February. Be sure to include the activity levels.

The Rescuers, Ltd. operates a fleet of trucks which locate and/or respond to calls from disabled cars or accidents. Repairs are done at the location of the problem (90% of which are on the QEW). If damage is too severe, or the problem is such that it cannot be taken care of immediately, the drivers tow the car to a location chosen by the vehicle owner The drivers of the trucks are considered independent contractors and are paid a set amount for each service incident that is completed on site (and nothing if they tow the vehicle, although they often receive tips from the vehicle owners and some repair shop offer "kickbacks" to tow trucks that bring in business). The firm owns the trucks, and pays for all repairs and maintenance, including gas. The firm budgets carefully for each month. Customers are charged a flat fee if towing is necessary, and various fees if repairs are conducted on site. Gas and repairs are budgeted on the basis of kilometers driven. The static budget variances for March, 2018 were as follows: Actual Variance Service Calls 18,000 13,500 4,500 234,000 18,240 12,979 5,261 269,800 240F 521U 761U 35,800U 75%Completed on site 2s7Towed Kilometers driven Revenue (from repairs) Revenue (from towing) Variable costs: $11,475,000 675,000 $10,386,200 789,150 $1,088,80OU 91,800F Gas Parts Payments to drivers 920,600 2430,0002.336,220 51,480 1,147,500 15,920 226,900F 66,960F Fixed costs 70,000 950,000 75,000 950,000 5,000U Salaries Depreciation on trucks Required: Prepare a flexible budget analysis for The Rescuers for the month of February. Be sure to include the activities levels. 1. 2 What changes can you see happening in this firm? What, if anything, would you recommend to management