A company produces a standard product. The estimated cost per unit is given below:

Materials Rs. 10 Direct Wages Rs. 8 Direct expenses Rs. 2 Variable overheads Rs. 3 Total Rs. 23 Semi-variable overheads at 100% activity level (10,000 units) are estimated to be Rs. 40,000 and these overheads vary in steps of Rs. 2,000 for each change in output of 1,000 units. Fixed overheads are estimated at Rs. 50,000. The selling price per unit is also estimated at Rs. 40.

Prepare a flexible Budget at 50%, 70% and 90% levels of activity.

[Ans.: Profit Rs. 5,000; Rs. 35,000; Rs. 65,000.]