McElroy Company has prepared the following master budget for 2021. Although McElroy has the capacity to manufacture 50,000 units, management expected the likely demand for its product to be 40,000 units in 2021; as such, it prepared the master budget to manufacture and sell 40,000 units. In early January 2022, the company was pleasantly surprised to find out that it manufactured and sold 45,000 units in 2021.

McElroy Company
Master (Static) Budget
For Year Ending December 31, 2021
Sales (40,000 units)		$ 2,800,000
Cost of Goods Sold:
Direct materials	$ 800,000
Direct labor	300,000
Indirect materials (variable)	24,000
Indirect labor (variable)	36,000
Depreciation	300,000
Salaries	200,000
Utilities (80% fixed)	100,000
Maintenance (40% variable)	50,000	1,810,000
Gross profit		$ 990,000
Operating expenses:
Commissions (5% of sales)	$ 140,000
Advertising (fixed)	150,000
Wages (variable)	100,000
Rent (fixed)	50,000
Total operating expenses		440,000
Operating Income		$ 550,000

Required:

Prepare the flexible budget (FB) for the actual operating level achieved in 2021.

Please include the process