1. The following is the cost of an article at a capacity level of 5000 units as given under A. For a variation of 25% in capacity above or below this level, the individual expenses vary as indicated under B.

A B

$ %

Material Cost 25,000 100

Labor Cost 15,000 100

Power 1,250 80

Repairs and maintenance 2,000 75

Stores 1,000 100

Inspection 500 20

Depreciation 10,000 -

Administrative OH 5,000 25

Selling 3,000 50

Total Cost 62,750

Cost per unit 12.55

Required:

Find the unit cost of production under each individual expense at the level of 4000 and 6000 units by preparing a flexible budget.