Q # 5

Inc. employs 10 production workers, working 8 hours a day, 20 days per month, at a normal capacity of 2,400 units. The direct labor wage rate is Rs. 6.30 per hour; direct materials are budgeted at Rs. 2 per unit produced. Fixed factory overhead is Rs. 960; supplies average Rs. 0.25 per direct labor hour; indirect labor is 1/6 of direct labor cost; and other charges are Rs. 0.25 per direct labor hour.

Required: Prepare the flexible budget for one month at 60%, 80%, and 100% of normal capacity, showing itemized manufacturing costs, total manufacturing cost, and total manufacturing cost per unit.