Problem:
Reed Company produced 160,000 units in 75,000 direct labor hours. Production for the period was estimated at 165,000 units and 82,500 direct labor hours. A flexible budget would compare budgeted costs and actual costs, respectively, at
• 75,000 hours and 75,000 hours
• 80,000 hours and 75,000 hours
• 82,500 hours and 75,000 hours
• 80,000 hours and 82,500 hours
Note: Please provide step by step solution.