ABC, a Car manufacturer, uses an activity based costing system for budgeting. ABC has identified four cost centers and their associated cost-drivers. The variable and fixed costs for each activity are listed below, along with cost-driver activity.

Activity	Variable Cost	Fixed Cost	Cost Driver Activity
Setup	$14,400	$15,000	12 setups
Processing	$180,000	$21,000	18,000 machine hours
Assembly	$90,000	$12,000	3,000 assembly line hours
Administration	$1,800	$18,000	6,000 units

ABC has developed a flexible budget for each activity based on the following activity. We assume that the manufacturer sells each unit of its product for $70.

Activity	Activity Level			Cost Driver
Sales in Units	5000	6000	7000
Setup	10	12	14	Number of Setups
Processing	15000	18000	21000	Machine Hours
Assembly	2500	3000	3500	Assembly Line Hours
Administration	5000	6000	7000	Units

(1) Develop flexible budget formula for each of the activities.

(2) Calculate the budgeted total cost for all the activity level in each of the activity centers.

(3) Determine the total costs and operating incomes for the manufacturer under each of the activity levels.

(4) Given the actual results in the following table, prepare a cost control performance report comparing the flexible budget to actual results for each activity, including flexible-budget variances. Similarly prepare an overall performance report for operating income.

Activity	Actual Activity Level	Actual Cost
Sales in Units	6500
Sales in $	43000
Setup	13	28000
Processing	19000	199000
Assembly	3200	110000
Administration	6500	22800