Green Company manufactures several products. Product 1 production manager reports that each product requires 2 pounds of A-material, 3 pounds of B-materials and 2 hours of labor. The cost of A-material and B-material are $2 and $2.5 per pound, respectively. Labor cost is $15 per hour. He also reports that most of the fixed overhead costs are allocated from Green Company, except supervision and inspection costs that are directly incurred and responsible by Product 1 production department. The following data were used in developing the master manufacturing overhead budget for the production department for the year 2020, which was prepared on the expectation that 40,000 units will be produced during the year. Annual variable overhead costs: indirect labor $120,000, indirect materials $80,000, factory utilities $32,000 and factory repairs $40,000. Annual fixed overhead costs: supervision $75,000, Product 1 production manager salary $24,000, inspection $21,000, depreciation $102,000, insurance $24,000, rent $54,000 and property taxes $9,000. In August, 4,500 units were actually produced with the following costs. Direct materials: A-materials $16,800, B-materials $34,000. Direct labor: $137,000 Variable overhead costs: indirect labor $12,000, indirect materials $8,000, factory utilities $3,100 and factory repairs $4,000. Fixed overhead costs: supervision $7,000, Product 1 production manager salary $2,000, inspection $3,500, depreciation 8,500, insurance $2,000, rent $5,000 and property taxes $500. Required: a. Prepare a monthly manufacturing overhead flexible budget for the year 2020, assuming production levels range from 4,000 to 7,000 units, using increments of 1,000 units. (10 marks) b. Prepare a responsibility report for Production Department in August. (8 marks)