Watarway Company's actual results reveal that it was profitable in the sale of its star product: a high$-$and spot$-$cleaningvacuum for

upholstery. But it was not nearly as profitable as manarement had hoped. Watervay's actual income statement and master budget

income statement are as follows. In order to kesp the focus on product costs, SGS$.$A costs ware omitted.

Hers are the company's standard cost cards for sach product cost.

$($a$)$

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Prepare a flexible budjet for Waterway Company $50$ manapament can evaluate the company's actual performance using a mors

appropriate benchmark.

$($b$)$

Detarmine Waterway's flexible budpet variances and sales activity variances: