QUESTION 1 As part of your accounts training programme with Maliwan Lid, a vehicle components production company, you are required to complete the following tasks using budgetary planning techniques: The expected cost details for the year 2022 are provided below: 70,000 hours represents the current full production capacity though a planned expansion of facilities during 2022 will increase the total capacity by 20%. ii) The direct machine hourly rate is expected to be $3.75 Indirect machine costs included: Variable machine costs 70p per direct machine hour Other supplies 31p per direct machine hour Staff support services 6% of direct and indirect machine costs iv) Semi-variable machine costs: The budget figures are to be based on the costs given in the table below which relate to the years 2018 to 2022 with the estimates provided for 2022. Use the high-low method as it is expected that these costs will correlate with direct machine hours, as they have for the previous four years. Year Direct machine hours Semi-variable costs ({) 2018 66,000 22.800 2019 61,000 21,800 2020 55,000 20,600 2021 51,000 19,800 2022 42,000 (estimate) 18,000 (estimate) v) Other semi-variable costs: Phone line rentals (fixed) charge f2,000, variable metered calls f14,000: Sales representatives' car expenses excluding depreciation: fixed $7,000, variable $48,000vi) Fixed costs: Administrative 30,000 Costs Depreciation of 23,000 machinery Business Rates 20,000 General 15,000 maintenance Other 8.500 REQUIRED: 1) Compile flexible budgets for 2022 at the activity levels of 56,000, 63,000, 70,000 direct machine hours and at a level 20% above existing production capacity. (Round to 2 decimal places)