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.