Olive Company makes silver belt buckles. The company\'s master budget appears in

Question

Olive Company makes silver belt buckles. The company's master budget appears in the first column of the table. Required Complete the table by preparing Olive's flexible budget for 5,900, 7900, and 8,900 units. (Round your intermediate calculations to 2 decimal places Master Budget Flexible Budget Flexible Budget Flexible Budget (6,900 Units) (5,900 Units) (7,900 Units) (8,900 Units) Direct materials Direct labor Variable manufacturing overhead 1,380 3,450 2,070 18,400 25,300 ed manufacturing overhead Total manufacturing cost

Explanation / Answer

Direct material cost/unit=(1380/6900)=$0.2/unit

Direct labor cost/unit=(3450/6900)=$0.5/unit

Variable manufacturing overhead/unit=(2070/6900)=$0.3/unit

NOTE:Total fixed cost and Variable cost/unit do not change with change in units.

6900 5900 7900 8900 Direct materials 1380 1180 1580 1780 Direct labor 3450 2950 3950 4450 Variable manufacturing overhead 2070 1770 2370 2670 Fixed manufacturing overhead 18400 18400 18400 18400 Total manufacturing cost 25300 24300 26300 27300

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