Giants Technologies Company {\"Giants\") conducts a trading business of apparel products. Giants' general manager. Julia. reports quarterlyr to the company board of directors on its operating performance. Giants uses a budget based on detailed expectations for the forthcoming quarter. Though the general manager was unhappy about the sales performance. Julia was glad that her cost performance Was favorable; otherwise, her operating income would be eaten worse. Giants' board of directors was not satised with the performance report below because it cannot see how this perfonneoce report helps the board evaluate cost-control performance. To address this matter. Julia proposed to prepare a exible budget for Giants. Giants' usual performance report Budget Actual Variance _--- (a) Assuming that all of the variable costs are proportional to net revenue, prepare a flexible budget for Giants at revenue levels of $7,000,000, $7,500,000, and $8,000,000 by using the format of the flexible budget below. Assume that prices and mix of products sold are equal to the budgeted prices and mix. (12 marks) Flexible- Flexible budgets for various levels of sales/ budget production activity formula (USS) Net revenue Variable costs Manufacturing costs Shipping costs Marketing costs Total variable cost Fixed costs Supervision Rent Depreciation Total fixed cost Total fixed and variable costs Operating income (b) Based on Giants' annual performance report, choose TWO variances and evaluate them. (6 marks) (c) Describe ethical dilemmas in the budgeting process for managers and employees. (6 marks) (d) Explain how a budget can motivate the managers and employees and serve as an incentive model. (9 marks)