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Answer the following questions:

  1. Using the approach discussed in Week 3, Presentation 3, develop a 2004 flexible budget and compute the flexible – actual variances.
  2. Determine direct cost variances (six for Frame; four each for Wheel and Final) and two overhead variances.
  3. What is causing these variances? Do you see any patterns or relationships among the variances that suggest possible causes?

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