PROBLEM 9 (26 pts.)Ott Company prepared a static budget for its operating costs based on the expectation of 5,000 hours of operation. The actual hours of operation ended up being 5,100 hours. The actual costs for the year are shown in the columnto the right of the static budget. Prepare a flexible budget based on the actual hours and then calculate the overall variance in dollars for each line item, starting with wages. (You will first need to calculate the rate for Utilities in the grayed area.)

Static Actual FlexibleFav. orbudgetresultsbudgetVarianceUnf. Hours of operation5,0005,1005,100Cost Items:Variable costs:RATEWages $ 18.50 $ 92,500 94,000 Utilities 4,000 4,400 Other Variable Costs $ 12.00 60,000 59,900 TOTAL VC $ 156,500 $ 158,300 Fixed costs:Building rentn/a 48,000 50,000 Depreciationn/a 1,100 1,100 TOTAL FC $ 49,100 $ 51,100 Total budgeted costs $ 205,600 $ 209,400