Final answer:
To calculate the flexible budget manufacturing cost amount for a month in which 1,040 units are produced, we can use the concept of flexible budgeting. The flexible budget allows us to adjust the budgeted cost based on the actual production volume. In this case, we can use the information provided to determine the cost per unit for each level of production: $12 per unit for 1,000 units, $8 per unit for 2,000 units, and $4 per unit for 5,000 units.
Step-by-step explanation:
To calculate the flexible budget manufacturing cost amount for a month in which 1,040 units are produced, we can use the concept of flexible budgeting. The flexible budget allows us to adjust the budgeted cost based on the actual production volume. In this case, we can use the information provided to determine the cost per unit for each level of production: $12 per unit for 1,000 units, $8 per unit for 2,000 units, and $4 per unit for 5,000 units.
Using this information, we can calculate the flexible budget manufacturing cost for 1,040 units by interpolating between the costs of producing 1,000 units and 2,000 units. The formula to calculate the flexible budget manufacturing cost is:
Flexible Budget Manufacturing Cost = Cost per Unit at Lower Volume + (Cost per Unit at Higher Volume - Cost per Unit at Lower Volume) × (Actual Production - Lower Volume) / (Higher Volume - Lower Volume)
Substituting the values into the formula:
Flexible Budget Manufacturing Cost = $12 + ($8 - $12) × (1,040 - 1,000) / (2,000 - 1,000)
Calculating the expression:
Flexible Budget Manufacturing Cost = $12 + (-$4) × 40 / 1,000 = $12 - $0.16 = $11.84