Question Two MM Ltd has following details available for the 2nd quarter of 2018. Fixed budget $ Actual results $ Income Sales 245,000 296,000 Expenses Materials Labour (production workers) Direct expenses Production overheads Selling & distribution Administration Other overheads 21,000 24,500 14,000 65,500 10,000 12,000 46,500 23,300 26,400 16,100 70,800 9,800 12,400 50,000 Profit 51,500 87,200 The above fixed budget has been prepared for 7,000 units and actual production and sales were 8,000 units Variable costs Materials, labour and direct expenses Semi-variable costs Production overhead (includes $6.50 variable cost per unit) Other overhead (includes $15,000 fixed cost) Fixed costs Administration and selling & distribution Required: (a) Calculate the variances between fixed budget and the actual results Prepare a flexible budget Calculate the variances between flexible budget and the actual results Comment on the results (e) Discuss different methods available to prepare budgets [2 mark [6 mark [4 mark [3 mark [5 mark