8-AI Flexible and Static Budgets Walcker Transportation Company's general manager reports quarterly to the company president on the firm's operating performance. The company uses a budget based on detailed expectations for the forthcoming quarter. The general manager has just received the condensed quarterly performance report shown in Exhibit 8-12. Although the general manager was upset about not obtaining enough revenue, she was happy that her cost performance was favorable; otherwise, her net income would be even worse. The president was not satisfied with the performance report and remarked, I can see some merit in comparing actual performance with budgeted performance because we can see whether actual rev- enue coincided with our best guess for budget purposes. But I can't see how this performance report helps me evaluate cost-control performance." 1. Prepare a columnar flexible budget for Walcker Transportation at revenue levels of $12,600,000, $13,000,000, and $13,400,000. Use the format of the last three columns of Exhibit 8-3, page 313. Assume that the prices and mix of products sold are equal to the bud- geted prices and mix. 2. Write out the flexible budget formula for costs as a function of revenue. 3. Prepare a condensed table showing the static budget variance, the sales-activity variance, and the flexible-budget variance. Use the format of Exhibit 8-6, page 316