Appliance Possible Inc. (AP) is a manufacturer of toaster ovens. To improve control over operations, the president of AP wants to begin using a flexible budgeting system, rather than use only the current master budget. The following data are available for APs expected costs at production levels of 80,000, 90,000, and 100,000 units.

Variable costs
Manufacturing		$6 per unit
Administrative		$3 per unit
Selling		$1 per unit
Fixed costs
Manufacturing		$130,000
Administrative		$70,000

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Prepare a flexible budget for each of the possible production levels: 80,000, 90,000, and 100,000 units. (List variable costs before fixed costs.)

APPLIANCE POSSIBLE INC. Flexible Production Cost Budget
Total Fixed CostsActivity LevelTotal CostsTotal Variable CostsProduction LevelsAdministrativeVariable CostsFixed CostsManufacturingSelling
Total CostsManufacturingProduction LevelsActivity LevelTotal Variable CostsTotal Fixed CostsFixed CostsVariable CostsSellingAdministrative
AdministrativeTotal Variable CostsVariable CostsTotal CostsFixed CostsActivity LevelProduction LevelsManufacturingSellingTotal Fixed Costs
Total Variable CostsManufacturingSellingAdministrativeProduction LevelsVariable CostsFixed CostsActivity LevelTotal Fixed CostsTotal Costs		$		$		$
Fixed CostsActivity LevelTotal CostsAdministrativeVariable CostsTotal Variable CostsProduction LevelsSellingManufacturingTotal Fixed Costs
ManufacturingProduction LevelsSellingActivity LevelTotal CostsVariable CostsTotal Variable CostsFixed CostsTotal Fixed CostsAdministrative
Activity LevelAdministrativeProduction LevelsSellingFixed CostsTotal Fixed CostsManufacturingVariable CostsTotal CostsTotal Variable Costs
Activity LevelAdministrativeProduction LevelsTotal CostsManufacturingSellingTotal Variable CostsFixed CostsTotal Fixed CostsVariable Costs
Activity LevelTotal Variable CostsManufacturingFixed CostsProduction LevelsTotal Fixed CostsVariable CostsAdministrativeTotal CostsSelling
Total CostsTotal Fixed CostsSellingFixed CostsProduction LevelsActivity LevelVariable CostsTotal Variable CostsAdministrativeManufacturing
Total Fixed CostsManufacturingVariable CostsTotal Variable CostsFixed CostsTotal CostsProduction LevelsActivity LevelSellingAdministrative
Total Fixed CostsTotal CostsProduction LevelsActivity LevelSellingManufacturingVariable CostsFixed CostsTotal Variable CostsAdministrative		$		$		$

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If AP sells the toaster ovens for $14 each, how many units will it have to sell to make a profit of $220,000 before taxes?

Units to be sold

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