PEL Company, produces farm equipment at several plants. The business is seasonal and cyclical in nature. The company has attempted to use budgeting for planning and controlling activities, but the variable nature of the business has caused some company officials to be skeptical of its usefulness. The chief accountant for the Adrian Plant has been using a flexible budget to held plant management control operations. The president asks for an explanation of flexible budgeting, Its application, and its possible use for the entire company. The chief accountant presents the following data: Budget data for 2020 Required: Normal monthly capacity of the plant in direct labour hour 10,000 hours Materials cost (6 lbs, @ Rs. 1.50). Rs. 9 per unit Labor cost (2 hours @ Rs. 6) Rs. 12 per unit Estimated factory overhead at normal monthly capacity: Variable factory overhead: Indirect labor. 7000 Indirect materials 600 Repairs 8.00 Total variable factory overhead Bs. 8.400 Fixed factory overhead: Depreciation. Supervision. Rs. 3,000 4.500 Total fixed factory overhead. B 7.500 Total faxed and variable factory overhead Rs. 15.900 4,200 5,500 Planned units for January Planned units for February. Actual data for January: Hours worked Units produced. Costs incurred: Materials (24,000 lbs.). Direct labor Indirect labor Indirect materials. Repairs Rs. Depreciation. Supervision. Total. 8,500 3,900 Rs. 34,000 52,000 6,000 600 1,800 2,500 3.500 Rs. 100,400 1. A manufacturing budget for January. 2. A report for January, comparing actual and budgeted costs for the month's actual activity, assuming that the units produced are to be the measure of activity used in preparing the flexible budget. 3. Explanation of the possibility of applying flexible budgeting to the nonmanufacturing activities of PEL Company.