QUESTION 5 1. Q. 5 (20 marks) Wollongong Equipment uses a flexible budget for its indirect manufacturing costs. For 2020, the company anticipated that it would produce 18 000 units with 3600 machine-hours and 7200 employee days. The expected costs and cost drivers are: Fixed Variable Cost driver Product handling $30 000 $0.40 per unit Inspection 8000 8.00 per 100 unit batch Utilities 400 4.00 per 100 unit batch Maintenance 1000 0.20 per machine-hour Supplies 5.00 per employee dayDuring the year, the company processed 20 000 units, worked 7500 employee days, and had 4000 machine-hours. The actual costs for 2020 were: Actual costs Product handling $36 000 Inspection 9000 Utilities 1600 Maintenance 1200 Supplies 37 500 Required: a. Prepare the static budget using the overhead items above and then calculate the static-budget variances. (5 marks) b. Prepare the flexible budget using the overhead items above and then calculate the flexible-budget variances. (15 marks)