Budgeted amounts for the year: Refer to the list below for the exact wording of

ID: 2490214 • Letter: B

Question

Budgeted amounts for the year:

Refer to the list below for the exact wording of an amount description within your budget.

Amount Descriptions

Required:

1) Prepare a flexible budget for 3,300, 3,800, and 4,300 units. (Note: Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

2 Calculate the unit cost at 3,300, 3,800, and 4,300 units. (Note: Round unit costs to the nearest cent.)

Materials 2 leather strips @ $7.50 Labor 0.5 hr @ $16.40 Variable overhead (VOH) 2.5 hr @ $1.60 Fixed overhead (FOH) $6,800

Explanation / Answer

Flexible Budget

Amount Description

Cost Formula

3,300 units

3,800 units

4,300 units

Materials

$7.50 per unit

$ 24,750

$ 28,500

$ 32,250

Labor

$16.40 per unit

$ 54,120

$ 62,320

$ 70,520

Variable overhead

$1.60 per unit

$ 5,280

$ 6,080

$ 6,880

Fixed overhead

$ 6,800

Total

$ 90,950

$ 103,700

$ 116,450

Unit cost at 3,300 units = $90,950/3,300 units = $27.56 per unit

Unit cost at 3,800 units = $103,700/3,800 units = $27.29 per unit

Unit cost at 4,300 units = $116,450 /4,300 units = $27.08 unit