Microsoft Corporation uses flexible budgeting for its software development projects. In November 2038, the company prepares the following budget:

• Budgeted Production: 100,000 units
• Actual Production: 110,000 units
• Budgeted Costs: $50,000,000
• Actual Costs: $55,000,000

Requirements:

• Prepare a flexible budget based on actual production.
• Perform variance analysis for budgeted vs. actual costs.
• Analyze the impact of production volume on costs.
• Recommend strategies to align actual costs with budgeted costs.
• Provide insights on the benefits of flexible budgeting.