1. Prepare a flexible budget on the basis of these expenses and sales value relating to a cost centre when operating at 90%,100% and 110% of normal capacity. The data are for 80% operating capacity.

$

Sales 120,000

Administrative Costs

Office Salaries 3,000

General expenses 1.5% of sales

Depreciation 1,500

Rates and taxes 1,750

Selling Costs

Salaries 4% of sales

Travel 1.5% of sales

General Expenses 1% of sales

Distribution Costs

Wages 3,000

Rent 0.5 of sales

Other Expenses 2% of sales