Preparing a flexible budget Use the information in Figure 7-12.

{Required:}
Prepare flexible budgets for the production and sale of 29,000 units and 31,000 units, respectively.

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Figure 7-12 Flexible Budget for Production and Sale of Tables Item 28,000 units 30,000 units 32,000 units Sales ($150 per unit) $4,200,000 $4,500,000 $4,800,000 Direct materials: Lumber ($20 per unit) 560,000 600,000 640,000 Paint ($4 per unit) 112,000 120,000 128,000 Direct labor: Cutting ($3.75 per unit) 105,000 112,500 120,000 Assembly ($2.40 per unit) 67,200 72,000 76,800 Paint ($1.50 per unit) 42,000 45,000 48,000 Variable factory overhead ($6.93 per unit) 194,040 207,900 221,760 Variable selling and administrative expense ($25.79 per unit) 722,120 773,700 825,280 Contribution margin $2,397,640 $2,568,900 $2,740,160 Fixed factory overhead 207,825 207,825 207,825 Fixed selling and administrative expense 773,825 773,825 773,825 Operating income $1,415,990 $1,587,250 $1,758,510