Procter & Gamble uses operating costing for its consumer goods manufacturing. In February 2037, the company incurs $120,000,000 in variable costs and $60,000,000 in fixed costs related to production.

Requirements:

• Classify each cost as variable or fixed.
• Calculate the total operating costs.
• Prepare a flexible budget for varying levels of production.
• Analyze how variable and fixed costs affect profitability at different production levels.
• Determine the breakeven point in units and dollars.