Question #1: (20 Marks) (48 minutes) Flex for success Snowflake Manufacturing Company manufactures motors for various small engines. The founder and President uses budgets in controlling costs. The company's production manager based the monthly budget amounts in his reports on an expected production of 60,000 units per month or 720,000 units per year. The assembling department manager is pleased with the report and expects a raise. The company President, however, is unhappy with the results for August, because only 58,000 units were produced. The August 2021 budget report for the company's assembling department is as follows: Manufacturing Costs Budget Actual Variable Costs Direct materials $48,000 $47,000 Direct labour 54,000 51,300 Indirect materials 24,000 24,200 Indirect labour 18,000 17,500 Utilities 15,000 14,900 Maintenance 9.000 9.200 Total Variable costs 168,000 164,100 Fixed Costs Rent 12,000 12.000 Supervision 17,000 18,000 Depreciation 2.000 2.000 Total Fixed costs 36,000 37.000 Total Costs $204,000 $201. 100 The President has heard about static and flexible budgets but is unsure what the differences are, and which one is best for Snowflake Manufacturing. He has asked you, his newly hired accountant, to prepare a brief memo for him that addresses these issues. What he would like you to do is to prepare the static budget variance and the flexible budget varlance. Once you have prepared these, he has asked you to analyze the results to see how the month of August really was. He knows that several of his managers could use some assistance in budgeting. So, in addition to the above, he would like you to include in the report a section of the benefits and pitfalls of budgeting and how budgets can be used appropriately at Snowflake Company. Required Prepare the report