Chacha Inc is a manufacturing firm and has provided following data related to costs:

Details...Fixed Cost/Month ($)..Cost/unit of production ($)

Wages and Salaries.. 22300.. 15

Parts and Supplies..x.. 8

Equipment Depreciation.. 1500.. 0.4

Lorry Operating Expenses.. 5900.. 1.5

Rent.. 3240 .. x

Administrative Expenses.. 4500.. 0.7

Chacha computes the total costs as fixed cost/month plus variable cost. The company expected to produce 2700 units in May, but actually produced 2900 units. The products selling price is $46 per unit.

a) Prepare static budget at the company's expected level of production

b) Prepare a flexible budget at the company's actual level of production

c) Indicate the variances wheather favoarable or unfavorable