Units		25,000	27,000	29,000
Production Cost
Variable cost
Direct Material	3	75,000	81,000	87,000
Direct Labor	5	125,000	135,000	145,000
Variable Overhead	10	250,000	270,000	290,000
Total Variable Costs	18	450,000	486,000	522,000
Fixed
Rent		20,000	20,000	20,000
Utilities		10,000	10,000	10,000
Salary		100,000	100,000	100,000
Total Fixed		130,000	130,000	130,000
Total cost		580,000	616,000	652,000

Prepare Flexible budget

	Budget	Actual	Variance	Favorable or Unfavorable
Units	27,000	27,000
Direct Mat.		95,000
Direct Labor		160,000
Variable Overhead		250,000
Total Variable costs		505,000
Rent		20,000
Utilities		10,000
Salary		110,000
Total Fixed		140,000
Total costs		645,000