Crane Corporations master (static) budget for the year is shown below:

Required:

1. During the year, the company manufactured and sold 56,300 units of product. Prepare a flexible budget for this level of output.

2. Now suppose that the actual level of output was 66,300 units. Prepare a flexible budget for this output level.

Sales (61,300 units) Cost of goods sold: 1,655,100 Direct materials Direct labor Overhead (variable overhead applied at 45% of direct labor cost) $153,250 441,360 253,000 847,610 $ 807,490 Gross profit Selling expenses: Sales commissions (all variable) Rent (all fixed) Insurance (all short-term fixed) $165,510 53,000 43,000 General expenses: Salaries (all short-term fixed) Rent (all short-term fixed) Depreciation (all short-term fixed) 98,500 83,500 63,000 506,510 $ 300,980 Operating income Required 1 Required 2 During the year, the company manufactured and sold 56,300 units of product. Prepare a flexible budget for this level of output. (Do not round intermediate calculations.) CRANE CORPORATION Flexible Budget Sales Less: Cost of goods sold: Direct materials Direct labor Manufacturing overhead Variable Fixed Gross profit Less: Operating expenses: Selling expenses: Sales commissions Rent Insurance General expenses: Salaries Rent Depreciation Operating income Required Required 2 Now suppose that the actual level of output was 66,300 units. Prepare a flexible budget for this output level. (Do not round intermediate calculations.) CRANE CORPORATION Flexible Budget Sales Less: Cost of goods sold: Direct materials Direct labor Manufacturing overhead: Variable Fixed Gross profit Less: Operating expenses: Selling expenses: Sales commissions Rent Insurance General expenses: Salaries Rent Depreciation Operating income