Question
Exercise 22-7 (Part Level Submission) Appliance Possible Inc. (AP) is a manufacturer of toaster ovens. To improve control over operations, the president of AP wants
Exercise 22-7 (Part Level Submission) Appliance Possible Inc. (AP) is a manufacturer of toaster ovens. To improve control over operations, the president of AP wants to begin using a flexible budgeting system, rather than use only the current master budget. The following data are available for APs expected costs at production levels of 80,000, 95,000, and 110,000 units.
Variable costs
Manufacturing $6 per unit
Administrative $3 per unit
Selling $2 per unit
Fixed costs
Manufacturing $139,000
Administrative $79,000
Prepare a flexible budget for each of the possible production levels: 80,000, 95,000, and 110,000 units. (List variable costs before fixed costs.)
APPLIANCE POSSIBLE INC. Flexible Production Cost Budget
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