Flexible Budget for Various Levels of Production Budgeted amounts for the year: Materials 2 leather strips @ $7.00 Labor 1.5 hr. @ $18.00 VOH 1.5 hr. @ $1.20 FOH $6,800 Required: 1. Prepare a flexible budget for 3,500, 4,000, and 4,500 units. Flexible Budget Variable Costper Unit 3,500 units 4,000 units 4,500 units Direct materials $ $ $ $ Direct labor Variable overhead Fixed overhead Total $ $ $ 2. CONCEPTUAL CONNECTION Calculate the unit cost at 3,500, 4,000, and 4,500 units. (Note: Round unit costs to the nearest cent.) Unit cost at 3,500 units $ Unit cost at 4,000 units $ Unit cost at 4,500 units $ What happens to unit cost as the number of units produced increases? The cost per unit as the number of units produced increases because fixed cost is spread over a greater number of units. Check My Work
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Flexible Budget for Various Levels of Production
Budgeted amounts for the year:
Required:Materials 2 leather strips @ $7.00 Labor 1.5 hr. @ $18.00 VOH 1.5 hr. @ $1.20 FOH $6,800 1. Prepare a flexible budget for 3,500, 4,000, and 4,500 units.
Flexible Budget Variable Cost
per Unit
3,500 units
4,000 units
4,500 unitsDirect materials $ $ $ $ Direct labor Variable overhead Fixed overhead Total $ $ $ 2. CONCEPTUAL CONNECTION Calculate the unit cost at 3,500, 4,000, and 4,500 units. (Note: Round unit costs to the nearest cent.)
Unit cost at 3,500 units $
Unit cost at 4,000 units $
Unit cost at 4,500 units $
What happens to unit cost as the number of units produced increases?
The cost per unit as the number of units produced increases because fixed cost is spread over a greater number of units.
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