Binky Ltd manufactures one product, the Whirl.

Currently it is operating at a normal level of activity of 60% which represents an output of 10080 units.

However the sales director believes that a realistic forecast for the next budget period would be a level of activity of 45%

Information:

60% 70% 80%

Direct materials 70560 82320 94080

Direct wages 50400. 58800. 67200

Production overhead 50240. 55280. 60320

Administration overhead 40000. 40000. 40000

Selling overhead 53320. 60040 66760

Total cost 264520 296440. 328360

Profit is 25% of selling price.

Required: Prepare a budget based on a level of activity of 45% which should show the contribution which can be expected.