18.1 Denholm Pargeter Limited is an engineering company producing a wide range of component parts for the aerospace industry. Its component XP04/H has the following budget sales and prime costs for March 20X1:

£

Sales: 1 200 units x £30 per unit 36 000 Costs Direct materials: 1 200 units x (3kg x £1.20) 4320 Direct labour: 1 200 units x (2 hours x £8.50) 20400 Prime cost 24720 The production manager wishes to assess the change to the budget on the basis that 1300 units are produced and sold.

You are required to flex the budget for component XP04/H for 1300 units.