You have been hired as a junior management accountant by Daisy and Co. which manufactures a range of small devices that help open garage doors. The senior management accountant has asked you to look at the costing system and help the business control its manufacturing overheads. Daisy and Co. have never used a flexible budget and you suggest that preparing a flexible budget will help the business in overhead planning and control. After discussions with the senior management accountant and other divisional heads, you determined the following cost formula and actual cost data for the Month ending 30 June 2022. Item Supplies Utilities Indirect labour Repairs and maintenance Depreciation of machinery Cost formula 0.60 per machine hour $41,200 plus $0.10 per machine hour $260,000 plus $1.40 per machine hour $80,000 plus $3.20 per machine hour $140,000 Actual Results $16,800 $48,400 $299,200 $156,800 $143,000 During June, Daisy and co. worked 26,000 machine hours and produced 15,000 units. Daisy and Co. had originally planned to work 30,000 machine hours during June. Required: a) Prepare a report separately showing activity and spending variances for June 2022 and explain what could be the reasons for these variances. (10 marks) b) A manager of an online clothing seller made the following comment: 'The whole budgeting process is a waste of time. I would rather my managers and finance staff focus on improving the business than spend time putting together detailed budgeting schedules'. Comment on this statement. (10 marks)