Truly Canadian and truly delicious, Purdys is a family-owned company that specializes in manufacturing and selling exceptionally good chocolate and chocolate products. The company emphasizes on working with sustainable cocoa and ensures that their farmer partners and co-ops are supported by programs that improve their profit and the livelihoods of their families. Recently, the company implemented the flexible budget across all divisions. In particular, the signature Canadian Collection division operates within the production relevant range of 250,000 to 350,000 chocolate truffles. Based on the most recent production data, the variable costs include direct materials $1.25 per truffle, direct labour $0.60 per truffle and manufacturing overhead $0.45 per truffle. The fixed costs include depreciation $72,850 and health and safety costs $24,500. Instructions (a) Prepare the Canadian Collection division's flexible budget for the relevant range of activities, using increments of 50,000 chocolate truffles. (6 marks) (b) Under what circumstances may a static budget be an appropriate basis for evaluating a manager's effectiveness in controlling costs? (2 marks) 5:48 AM