Please help me with creating a flexible budget based on the following information.

\fM11: Palo Activity M 1 1: Palo Activity You have been called in as a consultant for Palo, Inc a manufacturer of shower radios. Although Palo's management is very happy they reported $2,478 more in net operating income for the month than expected, they want to know why net operating income is higher especially since demand for the radios dropped. Information regarding the most recent month follows: Budget Actual Units 11,000 10,500 Sales ' $ 440,000 5 430,500 Variable Expenses: Variable Cost of Goods Sold $352,000 5 339,297 Variable Selling expenses $33,000 5 34,125 Total Variable Expenses $385,000 $373,422 Contribution Margin $ 55,000 $ 57,078 Fixed Expenses: Fixed Cost of Goods Sold 30,000 29,400 Fixed Selling and Administration 12,000 12,200 Total Fixed Expenses 42,000 41,600 Net Operating IncomelNOl) 5 13,000 5 15,478 Palo inc. uses a standard costing system and information regarding the standards for variable product costs are given below. Standard Information: Standard . Quant'g Price Rate ' Q Direct Materials 2.0 Pounds $5.00 per pound $10.00 _ Direct labor 1.5 Hours 5141!) per hour $21-00 Variable manufacturing Overhead 0.5 Mach hrs $2.00 per MH $1.00 Total Standard Variable Costs $32.00 Additional Information: - Actual quantity of materials used and purchased is 23,100 pounds. - Actual amount spent on direct materials is $117,117. I Average rate paid for direct labor for the month was $14.40 per hour. - The only variance in variable manufacturing overhead was due to activity level. Hint: You should be preparinga perfonnance report as well as examining the direct material and direct labor variances. in order to do this. you will need to break apart variable cost ofgoods sold into its 3 individual components