18.2A Dorchester Slugg Limited manufactures plastic refuse bins. Its monthly budget for August 20X6 is as follows:

£

Sales: 4 000 unitsX£18 72000 Costs Direct materials: 4000 (7kg x £1) (28 000)

Direct labour: 4 000 x (0.5 hours x £6.00) (12 000)

Production overhead (10 000)

22 000

£
Selling and administrative overhead (4000)
Net profit 18 000 Dorchester Slugg does not absorb production overheads using an overhead absorption rate. It may be assumed that all of its overheads are fixed in nature. You are required to flex the budget for a sales and production level of 4500 units.