Appliance Possible Inc. (AP) is a manufacturer of toaster ovens. To improve cont

Question

Appliance Possible Inc. (AP) is a manufacturer of toaster ovens. To improve control over operations, the president of AP wants to begin using a flexible budgeting system, rather than use only the current master budget. The following data are available for AP's expected costs at production levels of 90,000, 100,000, and 110,000 units. Variable costs Manufacturing Administrative Selling $7 per unit $4 per unit $1 per unit Fixed costs Manufacturing Administrative $150,000 $70,000 (a) Prepare a flexible budget for each of the possible production levels: 90,000, 100,000, and 110,000 units. (List variable costs before fixed costs.) APPLIANCE POSSIBLE INC. Flexible Production Cost Budget

Explanation / Answer

Prepare flexible budget :

Flexible budget Production units 90000 100000 110000 Variable cost Manufacturing 630000 700000 770000 Administrative 360000 400000 440000 Selling 90000 100000 110000 Total variable cost 1080000 1200000 1320000 Fixed cost Manufacturing 150000 150000 150000 Administrative 70000 70000 70000 Total fixed cost 220000 220000 220000 Total cost 1300000 1420000 1540000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.