Please give a step by step explanation

Using Flexible Budgets

The following summary data are from a performance report for Sterling Company for May, during which $2,400$ units were produced

The budget reflects the company's normal capacity of $2,500$ units.

a$.$ Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar.Using Flexible Budgets

The following summary data are from a performance report for Sterling Company for May, during which $2,400$ units were produced. The budget reflects the company$$s normal capacity of $2,500$ units.

Actual Cost Budget

$2,4002,500$ Variances

units units $ Type

Direct material $$68,400$ $$70,000$ $$(1,600)$ Favorable

Direct labor $138,600140,000(1,400)$ Favorable

Variable overhead $49,20048,0001,200$ Unfavorable

Fixed overhead $36,20036,000200$ Unfavorable

Total $$292,400$ $$294,000$ $$(1,600)$

a$.$ Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar.