Question 2 (25 Marks) A company has prepared the following fixed budget for the coming year. Sales 10,000 units Production 10,000 units N$ Direct materials 50,000 Direct labour 25,000 Variable overheads 12,500 Fixed overheads 10,000 Total 97,500 Budgeted selling price N$10 per unit. At the end of the year, the following costs had been incurred for the actual production of 12,000 units. N$ Direct materials 60,000 Direct labour 28,500 Variable overheads 15,000 Fixed overheads 11,000 Total 114,500 The actual sales were 12,000 units for N$122,000 (a) Prepare a flexed budget for the actual activity for the year. (13 marks) (b) Calculate the variances between actual and flexed budget, and summarize in a form suitable for management. (Use an absorption costing approach) (12 marks)