Tesla Inc. uses flexible budgeting for its electric vehicle production. In July 2039, the company prepares the following budget:

• Budgeted Production: 150,000 units
• Actual Production: 160,000 units
• Budgeted Costs: $75,000,000
• Actual Costs: $80,000,000

Requirements:

• Prepare a flexible budget based on actual production.
• Perform variance analysis for budgeted vs. actual costs.
• Analyze the impact of production volume on costs.
• Recommend strategies to align actual costs with budgeted costs.
• Provide insights on the benefits of flexible budgeting.