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

Sales (60,000 units)				$	1,860,000
Cost of goods sold:
Direct materials	$	168,000
Direct labor		450,000
Overhead (variable overhead applied at 40% of direct labor cost)		240,000			858,000
Gross profit				$	1,002,000
Selling expenses:
Sales commissions (all variable)	$	167,400
Rent (all fixed)		40,000
Insurance (all fixed)		30,000
General expenses:
Salaries (all fixed)		92,000
Rent (all fixed)		77,000
Depreciation (all fixed)		50,000			456,400
Operating income				$	545,600

Required:

1.	During the year the company manufactured and sold 55,000 units of product. Prepare a flexible budget for this level of output.

2.	Now suppose, that the actual level of output was 65,000 units. Prepare a flexible budget for this level of output.