The following information is available for Brownstone Products Company for the month of July:

Actual

Master Budget

Units

3,900

4,000

Sales revenue

$

60,400

$

60,000

Variable manufacturing costs

20,400

16,000

Fixed manufacturing costs

14,200

13,300

Variable selling and administrative expenses

9,100

8,000

Fixed selling and administrative expenses

10,500

10,200

Prepare pro forma budgets for activities within its relevant range of operations. Prepare a flexible budget for each of the following two output levels:

a. 3,890 units.

b. 4,290 units.

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	Flexible budget (a.)	Flexible budget (b.)	Master Budget
Units			4,000
Sales			$60,000
Variable costs:
Manufacturing			16,000
Selling and administrative			8,000
Total variable costs	$0	$0	$24,000
Contribution margin	$0	$0	$36,000
Fixed costs:
Manufacturing			13,300
Selling and administrative			10,200
Total fixed costs	$0	$0	$23,500
Operating income	$0	$0	$12,500