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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Flexible Budget with Different Levels of Production

Balboa Company budgeted the following amounts:

Chapter 9, Problem 47BEB, Flexible Budget with Different Levels of Production Balboa Company budgeted the following amounts:

Required:

Prepare a flexible budget for 4,000 units, 4,500 units, and 5,000 units.

To determine

Present a flexible budget for various levels of activity.

Explanation

Flexible Budgets:

Flexible budgets are prepared for various levels of activities or outputs. This enables the entity to know the result for the selected level of activity.

Presentation of flexible budget:

Particulars4,000 units ($)4,500 units ($)5,000 units ($)
Units4,0004,5005,000
Variable cost:   
Direct material ($1.3 per pound×3 pounds per unit×number of units)15,60017,55019,500
Add: Direct labor ($18 per hour×0.5hours per unit×number of units)36,00040,50045,000
Add: Variable overhead ($3

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