Activity-Based Flexible Budgeting Wade Paving Company has a sealcoating activity and wants to develop a flexible budget formula for the activity. The following resources are used by the activity: Five truck-mounted sealing units, with a lease cost of $13,000 per year per unit Ten sealcoating employees each paid a salary of $52,000 per year (A total of 12,000 sealcoating hours are supplied by the 10 workers.) Sealcoating materials: $400 per job Sealcoating hours: 4 hours used per job During the year, the activity operated at 85 percent of capacity and incurred the following actual activity and resource costs: Lease cost: $65,000 Salaries: $535,600 Sealcoating materials: $1,014,800 Required: 1. Prepare a flexible budget formula for the sealcoating activity using sealcoating hours as the driver. Sealcoating cost = + 2. Prepare a performance report for the sealcoating activity. In the last column of Wade Paving Company Activity-Based Performance Report, if variance amount is unfavorable select "U", select "F", if it is Favorable and select "NA" if there is no variance. Wade Paving Company Activity-Based Performance Report Actual Cost Budgeted Cost (85% level) Budget Variance Variance Activity Sealcoating: Fixed cost 00 0 Variable cost 3. What if sealcoating employees were hired through outsourcing and paid $30 per hour (the sealcoating equipment is provided by Wade)? Repeat Requirement 1 for the outsourcing case. Sealcoating cost + nce Variance 1 F U NA