Exercise 11-7 Preparing Flexible Budgets (LO2- CC12) (Algo) Heat Fast Inc. (HFI) is a manufacturer of heating elements for toaster ovens. To improve control over operations, the president wants to install a flexible budgeting system, rather than the single master budget being used at present. The following data are available for expected costs for production. The relevant range of production levels for fixed overhead costs is 80,000 to 180,000 units: Variable costs: Manufacturing Administrative Selling Fixed costs: Manufacturing Administrative $8.80/unit $4.25/unit $3.25/unit $ 162,100 $ 102,500 Required: Prepare a flexible budget for each of the three sales levels: 108,000, 118,000 and 128,000 units. Each toaster oven is expected to sell for $19.20. Variable costs: Total variable costs Fixed costs: Total fixed costs Total costs Heat Fast Inc. Flexible Budget Cost Formula Activity (toasters) (per toaster) 108,000 118,000 128,000
Exercise 11-7 Preparing Flexible Budgets (LO2- CC12) (Algo) Heat Fast Inc. (HFI) is a manufacturer of heating elements for toaster ovens. To improve control over operations, the president wants to install a flexible budgeting system, rather than the single master budget being used at present. The following data are available for expected costs for production. The relevant range of production levels for fixed overhead costs is 80,000 to 180,000 units: Variable costs: Manufacturing Administrative Selling Fixed costs: Manufacturing Administrative $8.80/unit $4.25/unit $3.25/unit $ 162,100 $ 102,500 Required: Prepare a flexible budget for each of the three sales levels: 108,000, 118,000 and 128,000 units. Each toaster oven is expected to sell for $19.20. Variable costs: Total variable costs Fixed costs: Total fixed costs Total costs Heat Fast Inc. Flexible Budget Cost Formula Activity (toasters) (per toaster) 108,000 118,000 128,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 11-7 Preparing Flexible Budgets (LO2- CC12) (Algo)
Heat Fast Inc. (HFI) is a manufacturer of heating elements for toaster ovens. To improve control over operations, the president wants to
install a flexible budgeting system, rather than the single master budget being used at present. The following data are available for
expected costs for production. The relevant range of production levels for fixed overhead costs is 80,000 to 180,000 units:
Variable costs:
Manufacturing
Administrative
Selling
Fixed costs:
Manufacturing
Administrative
$8.80/unit
$4.25/unit
$3.25/unit
$ 162,100
$ 102,500
Required:
Prepare a flexible budget for each of the three sales levels: 108,000, 118,000 and 128,000 units. Each toaster oven is expected to sell
for $19.20.
Variable costs:
Total variable costs
Fixed costs:
Total fixed costs
Total costs
Heat Fast Inc.
Flexible Budget
Cost Formula
Activity (toasters)
(per toaster)
108,000
118,000
128,000
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