NMP LTD., a newly established manufacturing company, has an installed capacity to

produce 100,000 units of a consumer product annually. However, its practical capacity

is only 90%. The actual capacity utilization may be substantially lower, as the firm is new

to the market and the demand is uncertain. The following budget has been prepared for

90% capacity utilization.

You are required to prepare the budgets at 70% and 80% levels of capacity

utilization giving clearly the :

(I) Unit Variable Costs

(II) Unit Fixed Cost

(III) Total Cost under various heads at all the above levels