Answer and Explanation:
The preparation of the flexible manufacturing budget is presented below:
Activity level
Finished units 75,600 96,600 117,600
(75,600 + 21,000)
Variable costs
Direct materials($3) $226,800 $289,800 $352,800
Direct labor ($7) $529,200 $676,200 $823,200
Overhead ($10) $756,000 $966,000 $1,176,000
Total variable costs $1,512000 $1,932,000 $2,352,000
Fixed costs
Depreciation [($4 × 1,207,200) ÷ 12] $402,400 $402,400
$402,400
Supervision [($1 × 1,207,200) ÷ 12] $100,600 $100,600 $100,600
Total fixed costs $503,000 $503,000 $503,000
Total costs $2,015,000 $2,435,000 $2,855,000
We simply added the total variable and total fixed cost so that the total cost could come and the same is shown above
