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Crane Corporations master (static) budget for the year is shown below: Sales (60,500 units) $ 2,178,000 Cost of goods sold: Direct materials $ 199,650 Direct

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

Sales (60,500 units) $ 2,178,000
Cost of goods sold:
Direct materials $ 199,650
Direct labor 484,000
Overhead (variable overhead applied at 30% of direct labor cost) 245,000 928,650
Gross profit $ 1,249,350
Selling expenses:
Sales commissions (all variable) $ 161,656
Rent (all fixed) 45,000
Insurance (all short-term fixed) 35,000
General expenses:
Salaries (all short-term fixed) 94,500
Rent (all short-term fixed) 79,500
Depreciation (all short-term fixed) 55,000 470,656
Operating income $ 778,694

Required:

1. During the year, the company manufactured and sold 55,500 units of product. Prepare a flexible budget for this level of output.

2. Now suppose that the actual level of output was 65,500 units. Prepare a flexible budget for this output level.

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