Question:
Determining flexible budget amounts
Solar Panels, Inc., has the following items and amounts as part of its master budget at the 10,000-unit level of sales and production:
|
Sales revenue
|
$100,000
|
|
Direct materials
|
20,000
|
|
Direct labor
|
15,000
|
|
Variable factory overhead
|
10,000
|
|
Fixed factory overhead
|
25,000
|
Determine the total dollar amounts for the above items that would appear in a flexible budget at the following volume levels, assuming that both levels are within the relevant range:
a. 8,000-unit level of sales and production
b. 12,000-unit level of sales and production