Question

Olive Company makes silver belt buckles. The company’s master budget appears in the first column of...

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 5,400, 7,400, and 8,400 units. (Round your intermediate calculations to 2 decimal places.)

Master Budget (6,400 Units) Flexible Budget (5,400 Units) Flexible Budget (7,400 Units) Flexible Budget (8,400 Units)
Direct materials $1,280
Direct labor 3,840
Variable manufacturing overhead 1,920
Fixed manufacturing overhead 18,400
Total manufacturing cost $25,440
Business   Accounting   
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Answer #1

Direct material/unit=(1280/6400)=$0.2

Direct labor/unit=(3840/6400)=$0.6/unit

Variable manufacturing overhead/unit=(1920/6400)=$0.3

Master Budget (6,400 Units) Flexible Budget (5,400 Units) Flexible Budget (7,400 Units) Flexible Budget (8,400 Units)
Direct materials $1,280 1080 1480 1680
Direct labor 3,840 3240 4440 5040
Variable manufacturing overhead 1,920 1620 2220 2520
Fixed manufacturing overhead 18,400 18,400 18,400 18,400
Total manufacturing cost 25440 24340 26540 27640.

NOTE:Total fixed costs and variable cost/unit do not chanhge with change in units.

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