**Evanson Company Flexible Budget Analysis**Evanson Company plans to produce 560,000 units over the year. The monthly production is expected to range from 40,000 to 80,000 units. The budgeted manufacturing costs per unit are detailed below:- **Direct Materials:** $19- **Direct Labor:** $20- **Variable Manufacturing Overhead:** $21- **Fixed Manufacturing Overhead:** $3**Objective:**Develop a flexible manufacturing budget with increments of 20,000 units.**Flexible Budget Structure:**| **Evanson Company** | **Monthly Flexible Manufacturing Budget** ||---|---|| **Activity Level** | || Finished Units | [Column for increments of 20,000 units] || **Variable Costs** | || Direct Materials | [Cost calculations at each activity level] || Direct Labor | [Cost calculations at each activity level] || Overhead | [Cost calculations at each activity level] || Total Variable Costs | [Summation of the above costs] || **Fixed Costs** | || Total Fixed Costs | [Remain constant] || **Total Costs** | [Variable + Fixed Costs] |**Explanation:**The table provides a framework for calculating costs at different production levels, showcasing how costs fluctuate with changes in activity. Variable costs vary with production volume, while fixed costs remain unchanged regardless of the activity level.

Solution: Budgeted fixed overhead for the year = Budgeted fixed overhead * Fixed overhead per unit…

Evanson Company expects to produce 560,000 units during the year. Monthly production is expected to range from 40,000 to 80,000 units. The company has budgeted manufacturing costs per unit to be as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $19 20 21 3 Required: Prepare a flexible manufacturing budget using 20,000 unit increments.

Evanson Company expects to produce 560,000 units during the year. Monthly production is expected to range from 40,000 to 80,000 units. The company has budgeted manufacturing costs per unit to be as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $19 20 21 3 Required: Prepare a flexible manufacturing budget using 20,000 unit increments.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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