Question Details

Calculate the following flexible budget amounts 


1.Perkins Company provides the following data developed for its master

Sales price……………………..	$11.00 per unit 
Costs:	
Direct materials…………………………	$3.00 per unit
Direct labor……………………….	$ 4.25 per unit
Variable overhead…………………….	$ 0.50 per unit
Factory depreciation………………….	$ 12,000 per month
Supervision ……………………………..	$ 11,000 per month
Selling expense………………………….	$ 0.25 per unit
Administrative cost……………………….	$ 9,000 per month

budget:
Required: Prepare flexible budgets for sales of 20,000, 22,000 and 24,000 units. Use a contribution
margin format.
2.Elroy Co. has prepared the following fixed budget for the year, assuming

production and sales of 30,000 units. This level of production represents 80% of

                                           Elroy co.
                                        Fixed budget
                              For year ending December 31
Sales………………………………………				$1,500,000
	Cost of good sold:
	Direct materials…………………		$540,000
	Direct labor………………………		$300,000
	Indirect materials(variables)…….		    15,000
	Indirect labor (variables)………..		    21,000
	Depreciation…………………….		  180,000
	Salaries………………………….		    90,000
Utilities (80% fixed)…………...		    54,000
Maintenance(40% variables)……		    33,000	1,233,000
Gross profit……………………………….				$ 267,000
Operating expenses:
	Commissions ……………………		$ 45,000
	Advertising (fixed)………………		   60,000
	Wages (variables)………………..		   15,000
	Rent ………………………………		   30,000
	Total operating expenses…………				    150,000
Income from operations……………………				$  117,000

capacity.
Calculate the following flexible budget amounts at the indicated levels of

	Operation at 60% of capacity 	Operation at 75% of capacity
Sales 		
Total variable costs		
Total fixed costs		
Income from operations		

capacity:



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