1.

Bowling Company budgeted the following amounts:

Variable costs of production:
	Direct materials	6 pounds @ $0.40 per pound
	Direct labor	0.3 hr. @ $15.2 per hour
	VOH:	0.6 hr. @ $3.00
FOH:
	Materials handling	$6,200
	Depreciation	$2,200

Required:

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Prepare a flexible budget for 2,500 units, 3,000 units, and 3,500 units.

Bowling Company
Flexible Budget
		2,500 units		3,000 units		3,500 units
Direct materials		$		$		$
Direct labor
Variable overhead
Fixed overhead:
Materials handling
Depreciation
Total		$		$		$

2.

Leslie Blandings, division manager of Audiotech Inc., was debating the merits of a new product