Question

Olive Company makes silver belt buckles. The company’s master budget appears in the first column of the table.

Required:
Complete the table by preparing Olive’s flexible budget for 5,000, 7,000, and 8,000 units. (Round your intermediate calculations to 2 decimal places.)

	Master Budget (6,000 Units) Flexible Budget (5,000 Units) Flexible Budget (7,000 Units) Flexible Budget (8,000 Units) Direct materials $1,200 Direct labor 3,600 Variable manufacturing overhead 1,800 Fixed manufacturing overhead 17,100 Total manufacturing cost $23,700

Answer 1

		Master Budget		Flexible Budget		Flexible Budget		Flexible Budget
		(6000 Units)		(5000 Units)		(7000 Units)		(8000 Units)
Direct Materials		$                1,200		$                  1,000		$                  1,400		$                  1,600
Direct Labor		$                3,600		$                  3,000		$                  4,200		$                  4,800
Variable Manufacturing Overhead		$                1,800		$                  1,500		$                  2,100		$                  2,400
Fixed Manufacturing Overhead		$             17,100		$                17,100		$                17,100		$                17,100
Totlal Manufacturing Cost		$             23,700		$                22,600		$                24,800		$                25,900