Question

Pets Plus Company has the following budgeted variable costs per unit produced:

Direct Materials $8.00

Direct Labor $1.77

Variable Overhead:

      Supplies $0.41

      Maintenance $0.33

      Power $0.26

Budgeted fixed overhead costs per month include supervision of $85,000, depreciation of $82,000, and other overhead of $256,000.

Required: a. Prepare a flexible budget for all costs of production for the following levels of production: 130,000 units, 145,000 units, and 150,000 units. (5 points)

Answer 1

a. Prepare a flexible budget for all costs of production for the following levels

Production level	130000	145000	150000
Variable cost
Direct material	1040000	1160000	1200000
Direct labour	230100	256650	265500
Variable overhead
Supplies	53300	59450	61500
Maintenance	42900	47850	49500
Power	33800	37700	39000
Total Variable Cost	1400100	1561650	1615500
Fixed overhead
Supervision	85000	85000	85000
Depreciation	82000	82000	82000
Other overhead	256000	256000	256000
Total Fixed overhead	423000	423000	423000
Total Cost	1823100	1984650	2038500