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Question 6 Foxtrot Manufacturing prepared budgets for two levels of activity were as follows: Capacity 50% 100% Budget Production (m3) 500 1000 Wages $1,000 $2,000
Question 6
Foxtrot Manufacturing prepared budgets for two levels of activity were as follows:
Capacity | 50% | 100% |
Budget Production (m3) | 500 | 1000 |
Wages | $1,000 | $2,000 |
Consumables | $750 | $1,500 |
Maintenance | $1,000 | $1,500 |
Power & Fuel | $1,500 | $2,000 |
Engineering | $4,000 | $4,000 |
Insurance | $1,000 | $1,000 |
$9,250 | $12,000 |
You are required to:
(a) Indicate which of the items are fixed, variable and semi-variable.
(b) Prepare a budget for 75% capacity; and
(c) Find the total cost, both fixed and variable, per units of output at 60%, 80% and 100% capacity.
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