1. A service company prepares a flexible budget: Sales revenue $500,000, variable costs $300,000, fixed costs $100,000, actual sales $450,000.
   • Requirements:
     • Prepare a flexible budget based on actual sales volume.
     • Calculate the revenue and spending variances.
     • Analyze the causes of revenue and spending variances.
     • Recommend corrective actions to address unfavorable variances.
     • Discuss how flexible budgeting and variance analysis can improve future budgeting processes.