Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and operating income for volume levels of 35,000, 55,000, and 80,000 pads.

Cost Cutter sells microwaves for $225 each and variable costs are $110 each. Fixed costs are $300,000 in the relevant range. Prepare a first quarter budgeted income statement using the contribution marign format. The number of units projected to be sold are in the first three months are 12,000, 14,500, and 15,000.

Solution:

Cost Cutter Monthly Flexible Budget

	Budget Amount Per Unit	Jan	Feb	Mar	Total
Unit		12,000