Question 5 (25 marks) - Budgeting Activities Mens Clothing Company produces men's ties since 1995. In order to reasonably plan and closely control their manufacturing costs, they use the budgeting system. The following budgeted and actual amounts are released to top management for 2020 and they asked you, a cost accountant, to prepare a performance budget report so that they can analyze all type of variances including both favourable and unfavorable. Cost Budget at 5,000 Units Direct materials Direct labour Equipment depreciation Indirect labour Indirect materials Rent and insurance $45,000 52,000 7,000 3,600 15,000 13,000 Actual Amounts at 4,800 Units $51,000 48,000 7,000 4,300 4,700 13,000 Instructions: a. Prepare a flexible budget report for Mens Clothing Company for the year. When creating a flexible budget, ensure to provide full calculation steps. (15 marks) Budgeted costs at Cost Actual costs at 4,800 units Variances Flexible Budget Variances 5,000 units $45,000 $51,000 Direct materials 48,000 52,000 Direct labour Equipment depreciatio 7,000 7,000 n 3,600 4,300 5,000 4,700 Indirect labour Indirect materials Rent and insurance 13,000 13,000 b. Briefly explain the budgeting process, i.e., its functions, advantages, disadvantages, and components of the master budget. (10 marks)