A ltd. Produce a standard product. The estimated cost per unit in given below Rs Raw materials 10 Direct wages 8 Direct expenses 2 Variable overheads 5 Fixed overhead is estimated to Rs.70,000 selling price per unit is Rs .40. Prepare a flexible budget at 50%, 70%, and 90% level of activity. Assume the output at 100% level of activity is 10,000 units. The following expenses relate to a cost center operating at 80% of normal capacity (Sales are Rs.1,20,000) Draw up flexible Administration, Selling and Distribution cost budget operating at 90%, 100% and 110% of normal capacity Administration cost Office Salaries Rs 3,000 General expenses Rs. 1.5% of Sales Depreciation Rs, 1,500 Rates and taxes Rs 1,750 Selling costs Salaries 4% of sales Travelling expenses 1.5% of sales Sales office expenses 1% of sales General expenses 1% of sales Distribution cost Wages Rs.3,000 Rent 0.5% of sales Other expenses 2% of sales

• Overheads will remain unchanged and 

• Direct labor hours will increase by 331/3 Draw up a budget and compute factory overheads rate ,the overheads being absorbed on direct wages.