Question 2 : Sharqiya Company estimates sales of 15,000 units for the upcoming period. At this sales volume its budgeted income is as follows:

Per Unit Total Sales $ 60 $ 900,000 Less variable costs: Manufacturing costs 30 450,000 Selling and administrative costs 10 150,000 Contribution margin $ 20 $ 300,000 Less fixed costs: Manufacturing costs 125,000 Selling and administrative costs 155,000 Net income $ 20,000

During the period the company actually produced and sold 18,000 units.

Required: Prepare a flexible budget based on 18,000 units.

Answer: Per Unit 18,000 Units Sales $ ? $ ? Less variable costs: Manufacturing costs ? ? Selling and administrative costs ? ? Contribution margin $ ? $ ? Less fixed costs: Manufacturing costs ? Selling and administrative costs ? Net income $ ?