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

Sales (60,100 units)				$	1,923,200
Cost of goods sold:
Direct materials	$	174,290
Direct labor		456,760
Overhead (variable overhead applied at 45% of direct labor cost)		241,000			872,050
Gross profit				$	1,051,150
Selling expenses:
Sales commissions (all variable)	$	162,270
Rent (all fixed)		41,000
Insurance (all fixed)		31,000
General expenses:
Salaries (all fixed)		92,500
Rent (all fixed)		77,500
Depreciation (all fixed)		51,000			455,270
Operating income				$	595,880

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 65,100 units. Prepare a flexible budget for this level of output.

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 profit 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 profit