Chimes Limited has prepared a flexible budget for one of its factories for the year to 30 June 2017. The details are as follows: 

Additional information:

1 The company only expects to operate at a capacity of 45 percent. At that capacity, the sales revenue has been budgeted at a level of £135,500.

2 Variable costs per unit are not expected to change, irrespective of the level of activity.

3 Fixed costs are also not likely to change, irrespective of the level of activity.

Required:

Prepare a flexible budget for the year to 30 June 2017 based on an activity level of 45 percent.

Transcribed Image Text:

% of production capacity Direct materials Direct labour Factory overhead Administration overhead Selling and distribution overhead 40% 50% £000 30% £000 £000 42 18 22 17 12 111 56 24 26 20 14 140 70 30 30 23 16 169 60% £000 84 36 34 26 18 198