​​​ This is a graded exercise. Please make sure to follow the instructions carefully, as an evaluator will be giving you feedback on your submission. You must submit your report as a file. Many times in business, budgets play a huge role in planning for how the business will operate in the future. Sara's Cake Company has been looking at implementing a flexible budget. As a consultant at Sara's Cake Company, you need to explain to management the importance of flexible budgets. You have been asked to write a 2-3 page report consisting of three parts. The paper should be written using APA format. In the first part, discuss in detail the definition of a flexible budget, the differences between flexible budgets and static budgets, and the different types of variance analysis. Then, convince management why they should implement a flexible budget for manufacturing. In the second part of the report, you need to use the information from the budget last month and compare this to the actual results (all listed in the table below) to find the direct material price variance, direct material quantity variance, direct labor rate variance, direct labor efficiency variance, variable overhead spending variance, and variable overhead efficiency variance. Make sure to analyze each variance to see if it is favorable or unfavorable. Budgeted No. of Cakes Sold: 2500 Actual No. of Cakes Sold: 2700 Cake Production per Labor Hour: 2 Sales Price per Cake: $15 Budgeted Cost Per Cake: Flour $1.25 Yeast $0.05 Sugar $0.25 Eggs $0.75 Butter $0.15 Frosting $0.95 Production Payroll $4.50 Actual Cost Per Cake: Flour $1.05 Yeast $0.05 Sugar $0.25 Eggs $0.55 Butter $0.15 Frosting $0.75Production Payroll $4.50 Budgeted Cost of Labor per Hour: $9.00 Budgeted Hours of Production: 1250 hours Actual Cost of Labor per Hour $9.25 Actual Hours of Production: 1400 hours Budgeted Variable Overhead Rate Per Labor Dollar: $0.25 Actual Variable Overhead $2,500