A. American Airlines Company Ltd is preparing a budget for the next fiscal period. 120 000 labour hours will be 100% level of expected productive time, but a flexible budget at 90%, 110% and 120% is required so that cost allowances can be set for these possible levels. Fixed Costs per annum Depreciation Staff salaries Insurances Rent and Rates Budgeted costs details $ 22 000 43 000 9 000 12 000 Variable Costs Power Consumables Direct labour $0.30 per direct labour hour $0.05 per direct labour hour $3.50 per direct labour hour Semi-Variable Costs Analysis of past records, adjusted to eliminate the effect on inflation shows the following: Direct labour hours Last year 6 Year 5 Year 4 Year 3 Year 2 Year 1 110 000 100 000 90 000 87 000 105 000 80 000 Total Semi-variable cost $ 330 000 305 000 280 000 272 500 317 500 255 000 Required: A. Prepare a Cost Budget (Flexible) at 100% and flexed to show cost allowances at 90%, 110% and 120%