The marketing director of W Limited is dissatisfied with the variances reported to him on the basis of actual costs being compared with a fixed budget for the costs attributed to the marketing function. He seeks your help and asks you to prepare for him a flexible budget for the calendar year 19X7, based on the following information which is stated for an estimated sales level of10 million unless stated otherwise. Fixed Costs Salaries sales representatives e000 200 60 32 100 - sales office Salary - related costs Rent Depreciation of furniture Depreciation of cars Insurance Advertising 67 20 250 Variable costs Sales representatives' commission Salary-related costs-12 % of commission Salcs representatives' ordinary expenses Bad debts Stationery and postage Agency fees 64 25 100 50 80 Semi- variable costs Telephone: rentals 2,000, metered calls 14,000 Sales representatives' car expenses excluding depreciation: fixed 7,000, variable 48,000. Sales promotions: the budget figures are to be based on the costs given below which relate to the years 19X2 to 19X5 and the estimates for 19X6. Costs e 000 384 402 368 450 478 Sales Emillion 4.2 5.1 3.4 7.5 8.9 ear 19X2 19X3 19X4 19X5 19X6 Estimate Estimate Ignore inflation. You are required to:- (a) Prepare a flexible budget for sales levels of 9 million, 10 million and 11.5 million. (b) Calculate the total marketing cost allowance, assuming sales of 10.75 million