Burchard's Freight and Haulage is a small trucking company in northern New South Wales. Basic bookkeeping tasks have previously been performed by a person with minimal training. Because of the growth of the business you have recently been appointed as accountant. The company's manager, Bob Burchard, has prepared the following performance report for May. Burchard's Freight and Haulage Performance report for the month ending 31 May Actual Static Budget Variance $ $ $ 105 000 110 000 5 000 U 15 950 22 000 12 300 23 350 73 600 31 400 Revenue from haulage less Variable expenses Fuel Vehicle maintenance Drivers' wages Other operating expenses Total variable expenses Contribution margin less Fixed expenses Depreciation on vehicles Cleaning Supervisory salaries Other operating expenses Total fixed expenses Net profit 15 700 23 500 12 500 25 200 76 900 33 100 250 U 1 500 F 200 F 1 850 F 3 300 F 1 700 U 2 700 900 8 100 11 600 2600 800 8 000 9 900 100 U 100 U 100 U 1 700 U 23 300 21 300 2 000 U 8 100 11 800 3 700 U Required 1. Prepare a columnar flexible budget for Burchard's Freight and Haulage based on revenue levels of $90 000. $100 000 and $110 000. 2. What is the flexible budget equation? 3. Prepare a detailed performance report which will show activity volume variances and flexible budget variances, item by item. 4. Although there are a number of favourable variances In Bob Burchard's report, actual net profit is only about 65% of budgeted net profit. Explain why this is so