Question

Vs) The CEO of Gold Coast Sun Umbrellas Company has come to you for help. Use the following data to prepare a flexible budget for possible sales production levels of 10 000, 11 000, and 12 000 units. Show the contribution margin at each activity level ssp-VC Sales price 524 per unit Variable costs: Manufacturing $12 per unit Administrative 53 per unit Selling Si per unit Fixed costs Manufacturing 560 000 Administrative $20 000

Answer 1

Above question is about preparation of flexible budget. Refer a below image for more detailed solution.

Solution Requirement: preparation of flexible budget : units levels of 11000 activity 12000 Variable cost per unit particulars 10o0o $240000 $264000 $288000 $120000 $132000 $ 144000 $36000 Sales (A) $ 24 peronit Variable costs: - Manofacturing $12 per unit - Administrative & 3 per unit - selling Total variable cost (B) contribution Margin (A-B) $33000 $ 11000 $12000 I $ 30000 $10000 $ 160000 per unit 176000 $192000 $ 80000 $88000 $96000 Fixed costs : - Manufacturing - Administrative Total Fixed costs (c) Total costs (B+C) - profit (A-B-C) $ 60000 $ 20000 $ 80000 $240000 $ 60000 $ 20000 $80000 $256000 $ 60000 20000 $80.000 $272000 $ 8000 $ 16000