Use the following data to prepare a flexible budget for possible sales/production levels of 5,000, 5,500,...

Use the following data to prepare a flexible budget for possible sales/production levels of 5,000, 5,500, and 6,000 units. Make sure to show the contribution margin at each activity level.

Sales price $11.00 per unit

Variable costs:

Manufacturing $6.00 per unit

Administrative $1.50 per unit

Selling $.50 per unit

Fixed costs:

Manufacturing $14,000

Administrative $5,000

Expert Solution

Particulars	Per unit	5000 units	5500 units	6000 units
Units sold		5,000	5,500	6,000

Sales revenue	$ 11.00	$ 55,000	$ 60,500	$ 66,000
Less: variable costs
Manufacturing	$ 6.00	$ 30,000	$ 33,000	$ 36,000
Administrative	$ 1.50	$ 7,500	$ 8,250	$ 9,000
Total variable costs	$ 7.50	$ 37,500	$ 41,250	$ 45,000
Contribution	$ 3.50	$ 17,500.00	$ 19,250.00	$ 21,000.00
Less: fixed costs
Manufacturing		$ 14,000	$ 14,000	$ 14,000
Administrative		$ 5,000	$ 5,000	$ 5,000
Total fixed costs		$ 19,000	$ 19,000	$ 19,000

Net operating income		$ (1,500.00)	$ 250.00	$ 2,000.00

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ekkarill92 answered 1 year ago

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