Halle Brothers Water Pump Company, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows: Indirect labor Indirect materials Maintenance Utilities $5.00 2.50 .80 .30 Fixed overhead costs per month are: Supervision $2,800 Insurance 1,200 Property taxes 700 Depreciation 1,500 The company believes it will normally operate in a range of 2,000 to 5,000 machine hours per month, Required 1. Prepare a flexible manufacturing overhead budget for the expected range of activity, using increments of 1,000 machine hours. 2. Prepare a budget report with variances based on the actual costs incurred as detailed below when the company operated in April 2020 at a level of 3,200 machine hours. Indirect labor Indirect materials Maintenance Utilities $16,800 7.680 2,880 1,600 Fixed overhead costs per month are: Supervision $3,080 Insurance 1,200 Property taxes 735 Depreciation 1,500 3. Comment on the possible reasons for any variances (favorable or unfavorable) and whether they are a concern in your opinion