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Elements of a Flexible Budgets

Presented are partial flexible cost budgets for various levels of output.
Required
Solve for items "a" though "n"

Rate per unit Units
1,000 1,500 2,000
Direct materials $10,000
Direct labor 3,000
Variable overhead
$3.00
Fixed overhead
Total $40,000

1 Answer

4 votes

Answer:

1000 units$25,000

1,500 units 32,500

2,000 units $40,000

Step-by-step explanation:

Partial flexible cost budgets for various levels of output

Rate per unit Units 1,000 1,500 2,000

DIRECT MATERIALS

Rate per unit

a.$10 ($10,000 / 1,000 units)

Units

1000 units

$10,000

1500 units

b. $15,000 (1,500 units * $10)

2000 units

c. $20,000 (2,000 units * $10)

DIRECT LABOR

Rate per units

d. $2 ($3,000 / 1,500 units)

Units

1000 units

e. $2,000 (1,000 units * $2)

2000 units

3,000

1000 units

f. $4,000 (1,000 units * $2)

VARIABLE OVERHEAD

Rate per units

$3.00

Units

1000 units

g. $3,000 (1,000 units * $3)

1500 units

h. $4,500 (1,500 units * $3)

2000 units

i. $6,000 (2,000 units * $3)

FIXED OVERHEAD

Units

1000 units

j.$10,000

1500 units

k.$10,000

2000 units

l.$10,000 (40,000 - 20,000 - 4,000 - 6,000)

TOTAL

1000 Units

Direct materials $10,000

Direct labor $2,000

Variable overhead $3,000

Fixed cost $10,000

= m. $25,000

1500 Units

Direct materials $15,000

Direct labor $3,000

Variable overhead $4,500

Fixed cost $10,000

=n. $32,500

2000 Units

Direct materials $20,000

Direct labor $4,000

Variable overhead $6,000

Fixed cost $10,000

= $40,000

Therefore :

1000 units$25,000

1,500 units 32,500

2,000 units $40,000

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