LO 15-2 Exercise 15-2 Preparing master and flexible budgets Allard Manufacturing Company established the following standard price and cost data. 3 Sales price Variable manufacturing cost Fixed manufacturing cost Fixed selling and administrative cost $10.00 per unit $6 per unit $3,000 total $1,000 total Allard planned to produce and sell 2,000 units. Actual production and sales amounted to 2,200 units. Performance Evaluation 557 Required a. Prepare the pro forma income statement in contribution format that would appear in a mas- ter budget. b. Prepare the pro forma income statement in contribution format that would appear in a flexible budget. Exercise 15-3 Using a flexible budget to accommodate market uncertainty According to its original plan, Bailey Consulting Services Company plans to charge its cus- tomers for service at $160 per hour in 2014. The company president expects consulting services provided to customers to reach 45,000 hours at that rate. The marketing manager, however, argues that actual results may range from 40,000 hours to 50,000 hours because of market uncertainty. Bailey's standard variable cost is $60 per hour, and its standard fixed cost is $1,800,000. Required Develop flexible budgets based on the assumptions of service levels at 40,000 hours, 45,000 hours, and 50,000 hours. LO 15-2