Problem I The VP of Geico Company, Mr. Antonio Black, has come to you for help. Use the following data to prepare a flexible budget for possible sales/production levels of 10,000, 15,000 and 20,000 units. Show him the contribution margin and operating income/(loss) at each activity level:

1- Sales price $30 per unit

2- Variable costs:

a- Manufacturing $10 per unit

b- Administrative $3 per unit

c- Selling $1 per unit

4- Fixed costs:

a- Manufacturing $70,000

b- Administrative $30,000

Instructions: Fill-in the blanks and complete the following budget schedule:

Flexible Budget For Various Levels

of Sales/Production Activity

Units 10,000 15,000 20,000

Sales

Variable Costs:

Manufacturing

Administrative

Selling

Total Variable Costs - - -

Contribution Margin - - -

Fixed Costs:

Manufacturing

Administrative

Operating Income/(Loss) $- $- $-