Flexible Budget | Problems and Solutions
Arjun EP
Flexible Budget
Budget which is changed according to level of activities is known flexible budgeting.
It gives different budgeted cost for different level of activities.
A flexible budget is prepared after making difference classification of all the expenses.
They are fixed cost, variable cost and semi-variable cost.
Methods of flexible budget
Tabular method
Segregation method
Budgeted allowance method
Overhead variance method
Step for calculation flexible budget
Determine range of activity
Identification of cost behavior
Select the level of activity
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Flexible Budget TU Questions and Solutions
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2060 Modified
ABC Company produces 25,000 units of output at 100% capacity attained with the following cost details:
|
Items of cost |
Unit costs |
|
|
Materials |
$10 |
|
|
Labour |
$5 |
|
|
|
||
|
Manufacturing expenses (25% variable 75% fixed) |
$8 |
|
|
Administrative expenses (50% variable 50% fixed) |
$6 |
|
|
Selling expenses (75% variable 25% fixed) |
$4 |
|
Required: Flexible budget for 75% and 90% output level for next month
[Answers: Variable cost = $431,250 and $517,500;
Fixed cost =250,000; Total cost = $681,250; $767,500]
SOLUTION
Given and working note:
Calculation for 25,000 units
|
Activities |
Cost basis |
Variable cost |
Fixed cost |
|
|
|
|
Per unit |
Total |
|
|
Materials |
Variable |
10 |
250,000 |
– |
|
Labour |
Variable |
5 |
125,000 |
– |
|
Manufacturing expenses |
Semi-variable |
2 |
50,000 |
25,000 x Rs 8 @75 = 150,000 |
|
Administrative expenses |
Semi-variable |
3 |
75,000 |
25,000 x Rs 6 @ 50% = 75,000 |
|
Selling expenses |
Semi-variable |
3 |
75,000 |
25,000 x Rs 4 @ 25% = 25,000 |
Flexible budget
ABC Company
For 75% and 90%
|
Particulars |
100% base |
75% |
90% |
|
|
25,000 units |
18,750 units |
22,500 units |
|
Variable cost: |
. |
. |
. |
|
Materials |
250,000 |
1,87,500 |
2,25,000 |
|
Labour |
125,000 |
93,750 |
1,12,500 |
|
Manufacturing expenses |
50,000 |
37,500 |
45,000 |
|
Administrative expenses |
75,000 |
56,250 |
67,500 |
|
Selling expenses |
75,000 |
56,250 |
67,500 |
|
Total variable cost (A) |
5,75,000 |
4,31,250 |
5,17,500 |
|
Fixed cost: |
. |
. |
. |
|
Manufacturing expenses |
1,50,000 |
1,50,000 |
1,50,000 |
|
Administrative expenses |
75,000 |
75,000 |
75,000 |
|
Selling expenses |
25,000 |
25,000 |
25,000 |
|
Total fixed cost (B) |
2,50,000 |
2,50,000 |
2,50,000 |
|
Budgeted total cost (A+B) |
$8,25,000 |
$6,81,250 |
$7,67,500 |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2060 Modified
Following extracted data are given below by CB Company:
|
Budgeted allowance = $100,000 + $3 times labour hour |
|
|
|
|
|
Normal capacity |
20,000 DLH |
|
Standard time allowed is |
2 units per labour hour. |
|
Actual output recorded |
45,000 units |
|
Actual labour paid |
23,000 hours |
|
Actual overhead incurred |
$166,000. |
Required: Three overhead variances
[Answers: SV = $3,000 F; EV = $1,500 U; CV = $12,500 F]
*SQ = 45,000 × y unit = 22,500
SOLUTION
Given and working note:
|
Normal capacity |
= 20,000 units |
|
|
||||||
|
Standard machine hours |
= 2* labour hours |
|
|
||||||
|
Budgeted fixed cost (FC) |
= $100,000 |
|
|
||||||
|
Fixed cost per unit |
= FC ÷ Normal output |
= 100,000 ÷ 20,000 |
= $5 |
||||||
|
Variable cost per unit |
= given |
= $3 |
|
||||||
|
Hourly overhead rate (SR) |
= FC + VC |
= $5 + $3 |
= $8 |
||||||
|
Actual expenses incurred |
= given |
= $166,000 |
|
||||||
|
Actual machine hours (AQ) |
= 23,000 MH |
|
|
||||||
|
Actual production (SQ) |
= 45,000 units x y unit |
= 22,500 MH |
|
||||||
|
|
|||||||||
|
Again |
|||||||||
|
O1 |
Actual overhead |
Given |
166,000 |
||||||
|
O2 |
Standard FC + VCPU x AQ |
100,000 + 3 x 23,000 MH |
169,000 |
||||||
|
O3 |
Standard FC + VCPU x SQ |
100,000 + 3 x 22,500 MH |
167,500 |
||||||
|
O4 |
SR x SQ |
8 x 22,500 MH |
180,000 |
||||||
|
|
|||||||||
|
Now |
|||||||||
|
1. Overhead spending variance |
= O1 – O2 |
= 1,66,000 – 1,69,000 |
= ($3,000) F |
||||||
|
2. Overhead efficiency variance |
= O2 – O3 |
= 1,69,000 – 1,67,500 |
= $1,500 U |
||||||
|
3. Overhead capacity variance |
= O3 – O4 |
= 1,67,500 – 1,80,000 |
= ($12,500) F |
||||||
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2060/S Modified
The manufacturing overhead costs of ABC Company are detailed below:
|
Manufacturing overhead cost for |
20,000 units |
40,000 units |
|
|
Indirect materials |
$20,000 |
$40,000 |
|
|
Indirect labour |
$40,000 |
$80,000 |
|
|
Supervision (y = a + bx) |
$30,000 |
$50,000 |
|
|
Maintenance (y = a + bx) |
$40,000 |
$70,000 |
|
|
Depreciation |
$50,000 |
$50,000 |
|
|
Rent and rates |
$10,000 |
$10,000 |
|
Required: Budget for 30,000 units by using table method.
[Answers: VC = $165,000; FV = $80,000; TC = $245,000]
SOLUTION
Given and working note:
Calculation for 20,000 units
|
Activities |
Cost basis |
Variable cost |
Fixed cost = Total cost – Variable cost |
|
|
|
|
Per unit |
Total |
|
|
Indirect materials |
Variable |
1 |
20,000 |
– |
|
Indirect labour |
Variable |
2 |
40,000 |
– |
|
Supervision |
Semi-variable |
1 |
20,000 |
30,000 – 20,000 = 10,000 |
|
Maintenance |
Semi-variable |
1.5 |
30,000 |
40,000 – 30,000 = 10,000 |
|
Depreciation |
Fixed |
– |
– |
50,000 |
|
Rent and rates |
fixed |
– |
– |
10,000 |
Variable cost per unit (VCPU) = Different in cost ÷ Different in units
Supervision = ($50,000 – $30,000) ÷ (40,000 units – 20,000 units) = $1
Maintenance = ($70,000 – $40,000) ÷ (40,000 units – 20,000 units) = $1.5
Flexible budget
ABC Company
For 30,000 units
|
Particulars |
100% base |
|
|
|
20,000 units |
30,000 units |
|
Variable cost: |
. |
. |
|
Indirect materials |
20,000 |
30,000 |
|
Indirect labour |
40,000 |
60,000 |
|
Supervision |
20,000 |
30,000 |
|
Maintenance |
30,000 |
15,000 |
|
Total variable cost (A) |
1,10,000 |
1,65,000 |
|
Fixed cost: |
. |
. |
|
Supervision |
10,000 |
10,000 |
|
Maintenance |
10,000 |
10,000 |
|
Depreciation |
50,000 |
50,000 |
|
Rent and rates |
10,000 |
10,000 |
|
Total fixed cost (B) |
80,000 |
80,000 |
|
Budgeted total cost (A+B) |
$1,90,000 |
$2,45,000 |
######
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Accounting Equation |
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Journal Entries in Nepali |
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Journal Entries |
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Journal Entry and Ledger |
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Ledger |
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Subsidiary Book |
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Cashbook |
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Trial Balance and Adjusted Trial Balance |
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Bank Reconciliation Statement (BRS) |
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Depreciation |
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Financial Accounting and Analysis (All videos) |
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Accounting Process |
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Accounting for Long Lived Assets |
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Analysis of Financial Statement |
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######
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2061 Modified
The cost details of CD Company at two levels of output have been given below:
|
Capacity in % |
50% |
100% |
|
|
Output in units |
10,000 |
20,000 |
|
|
Manufacturing cost |
$80,000 |
$140,000 |
|
Required: by using flexible budgeting formula (BA = FC + b × LA)
Budget for 15,000 units 22,000 units and 30,000 units
[Answers: VCPU = $6; Fixed cost = $20,000;
Total cost = $110,000; $152,000 and $200,000]
SOLUTION
Given and working note:
|
We know that, BA = FC + b x LA |
||||
|
Where: |
||||
|
BA = y = budgeted allowance |
||||
|
FC = a = fixed cost |
||||
|
VCPU = b = variable cost per unit |
||||
|
LA = x = level of activity |
||||
|
|
||||
|
Variable cost per unit (b) |
= Different in cost ÷ Different in units |
|||
|
|
= ($140,000 – $80,000) ÷ (20,000 units – 10,000 units) |
|||
|
|
= $6 |
|||
|
|
||||
|
Fixed cost (a) |
= y – bx |
|||
|
|
= $80,000 – $6 x 10,000 units |
|||
|
|
= $20,000 |
|||
|
|
||||
|
Now, |
||||
|
Budgeted allowance |
= FC + b x LA |
|||
|
For 15,000 units |
= $20,000 + $6 x 15,000 |
= $1,10,000 |
||
|
For 22,000 units |
= $20,000 + $6 x 22,000 |
= $1,52,000 |
||
|
For 30,000 units |
= $20,000 + $6 x 30,000 |
= $2,00,000 |
||
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2061/S Modified
On a request, the manager of RM Department submitted the following budget estimates on the basis of which a flexible budget is to be constructed for the department.
|
Particulars |
6,000 DLH |
9,000 DLH |
|
|
Employee salaries |
$30,000 |
$30,000 |
|
|
Repairs materials (indirect) |
$40,200 |
$60,300 |
|
|
Miscellaneous expenses |
$13,200 |
$16,800 |
|
Required: Flexible budget for 8,000 and 10,000 DLH level (Assume that these levels are within the capacity volume)
[Answers: Variable cost = $63,200 and $79,000; Fixed cost = $36,000;
Total cost = $99, 200 and $115,000]
SOLUTION
Given and working note:
Calculation for 6,000 units
|
Activities |
Cost basis |
Variable cost |
Fixed cost = Total cost – Variable cost |
|
|
|
|
Per unit |
Total |
|
|
Salary |
Fixed |
– |
– |
30,000 |
|
Repairs and maintenance |
Variable |
6.7 |
40,200 |
– |
|
Miscellaneous expenses |
Semi-variable |
1.2 |
7,200 |
13,200 – 7,200 = 6,000 |
|
|
|
|
|
|
|
Variable cost per unit (VCPU) |
= Different in cost ÷ Different in units |
|
|
Miscellaneous expenses |
= ($16,800 – $13,200) ÷ (9,000 units – 6,000 units) = $1.2 |
|
|
|
||
|
Fixed cost (a) |
= y – bx |
|
|
|
= $13,200 – $1.2 x 6,000 units |
|
|
|
= $6,000 |
|
Flexible budget
RM Department
For 8,000 units and 10,000 units
|
Particulars |
100% base 6,000 units |
8,000 units |
10,000 units |
|
Variable cost: |
. |
. |
. |
|
Repairs and maintenance |
40,200 |
53,600 |
67,000 |
|
Miscellaneous expenses |
7,200 |
9,600 |
12,000 |
|
Total variable cost (A) |
47,400 |
63,200 |
79,000 |
|
Fixed cost: |
. |
. |
. |
|
Salary |
30,000 |
30,000 |
30,000 |
|
Miscellaneous expenses |
6,000 |
6,000 |
6,000 |
|
Total fixed cost (B) |
36,000 |
36,000 |
36,000 |
|
Budgeted total cost (A+B) |
$83,400 |
$99,200 |
$115,000 |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2062 Modified
At 90% normal capacity level the selling department of a factory organization attains sales for $630,000 with following expenses.
|
Administrative expenses: |
|
|
Depreciation rent and taxes |
$18,100 |
|
Staff salary |
$91,500 |
|
Running expenses |
2.5% of sales |
|
|
|
|
Marketing expenses: |
|
|
Wages (fixed) |
$17,500 |
|
Salesmen salaries & commission |
12% of sales |
|
|
|
|
General expenses: |
|
|
Fixed |
$12,500 |
|
Variable |
2% of sales |
Required: Statement of flexible budget at 80% and 100 % capacity level
[Answers: Variable cost= $92,400 and $115,500; Fixed cost = $139,600;
Total overhead at 80% = $232,000 and 100% = $255,100]
SOLUTION
Flexible budget
Factory Organization
For 8,000 units and 10,000 units
|
Particulars |
90% base |
80% |
100% |
||
|
Sales Revenue [at 90% based Rs 630,000] |
630,000 |
560,000 |
700,000 |
||
|
Variable cost: |
– |
– |
– |
||
|
Running expenses |
[administrative 2.5 % of sales] |
15,750 |
14,000 |
17,500 |
|
|
Salesman salary |
[marketing 12 % of sales] |
75,600 |
67,200 |
84,000 |
|
|
General expenses |
[variable marketing 2 % of sales] |
12,600 |
11,200 |
14,000 |
|
|
Total variable cost (A) |
1,03,950 |
92,400 |
1,15,500 |
||
|
Fixed cost: |
– |
– |
– |
||
|
Depreciation, rent and tax |
[administrative] |
18,100 |
18,100 |
18,100 |
|
|
Staff Salary |
[administrative] |
91,500 |
91,500 |
91,500 |
|
|
Wages |
[fixed, marketing] |
17,500 |
17,500 |
17,500 |
|
|
General expenses |
[fixed, marketing] |
12,500 |
12,500 |
12,500 |
|
|
Total fixed cost (B) |
1,39,600 |
1,39,600 |
1,39,600 |
||
|
Budgeted total cost (A+B) |
$2,43,550 |
$2,32,000 |
$2,55,100 |
||
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2063 Modified
Manufacturing overhead costs in a Food Processing Company have been summarized as:
|
Indirect materials |
$1 per DLH |
|
Indirect labour |
$2 per DLH |
|
Supervision cost (variable) |
$0.5 per DLH |
|
Supervision cost (fixed) |
$20,000 |
|
Repairs and maintenance (variable) |
$1 per DLH |
|
Repairs and maintenance cost (fixed) |
$30,000 |
|
Depreciation and other costs |
$50,000 |
Required: Budget for 4,000 DLH and 6,000 DLH by using table method
[Answers: Variable cost = $18,000 and $27,000;
Fixed cost = $100,000; Total cost = $118,000 and $127,000]
SOLUTION
Flexible Budget
Food Processing Company
For 4,000 DLH and 6,000 DLH
|
Particulars |
4,000 DLH |
6,000 DLH |
|
|
Variable cost: |
– |
– |
|
|
Indirect materials |
DLH @ $1 |
4,000 |
6,000 |
|
Indirect labour |
DLH @ $2 |
8,000 |
12,000 |
|
Supervision |
DLH @ $0.5 |
2,000 |
3,000 |
|
Repairs and maintenance |
DLH @ $1 |
4,000 |
6,000 |
|
Total variable cost (A) |
18,000 |
27,000 |
|
|
Fixed cost: |
– |
– |
|
|
Supervision |
20,000 |
20,000 |
|
|
Repairs and maintenance |
30,000 |
30,000 |
|
|
Depreciation |
50,000 |
50,000 |
|
|
Total fixed cost (B) |
1,00,000 |
1,00,000 |
|
|
Budgeted total cost (A+B) |
$1,18,000 |
$1,27,000 |
|
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2064 Modified
The flexible budgeting formula at a normal capacity volume of 10,000 machine hours is:
BA = $50,000 + $2 × MH
One unit of output will need 0.5 MH
In the year a company produced 23,000 units of output, by working for 11,000 machine hours.
The total overhead costs of the company for the year amounted to $74,200.
Required: (1) Fixed manufacturing overhead cost capacity variance;
(2) Variable manufacturing overhead efficiency and spending variance
[Answers: CV = $7,500 (F); EV = $1,000 (F); SV = $2,200 (A)]
*SQ = 23,000 units × 0.5 M.H = 11,500 DLH
SOLUTION
Given and working note:
|
Normal capacity |
= 10,000 units |
|
|
|||||
|
Standard machine hours |
= 2* hours per unit |
|
|
|||||
|
Budgeted fixed cost (FC) |
= $50,000 |
|
|
|||||
|
Fixed cost per unit |
= FC ÷ Normal output |
= 50,000 ÷ 10,000 |
= $5 |
|||||
|
Variable cost per unit |
= given |
= $2 |
|
|||||
|
Hourly overhead rate (SR) |
= FC + VC |
= $5 + $2 |
= $7 |
|||||
|
Actual expenses incurred |
= given |
= $74,200 |
|
|||||
|
Actual machine hours (AQ) |
= 11,000 MH |
|
|
|||||
|
Actual production (SQ) |
= 23,000 units x 0.5 M.H |
= 11,500 DLH |
|
|||||
|
|
||||||||
|
|
||||||||
|
Again |
||||||||
|
O1 |
Actual overhead |
Given |
74,200 |
|||||
|
O2 |
Standard FC + VCPU x AQ |
50,000 + 2 x 11,000 DLH |
72,000 |
|||||
|
O3 |
Standard FC + VCPU x SQ |
50,000 + 2 x 11,500 DLH |
73,000 |
|||||
|
O4 |
SR x SQ |
7 x 11,500 DLH |
80,500 |
|||||
|
|
||||||||
|
|
||||||||
|
Now |
||||||||
|
1. Overhead spending variance |
= O1 – O2 |
= 74,200 – 72,000 |
= $2,200 UF |
|||||
|
2. Overhead efficiency variance |
= O2 – O3 |
= 72,000 – 73,000 |
= ($1,000) F |
|||||
|
3. Overhead capacity variance |
= O3 – O4 |
= 73,000 – 80,500 |
= ($7,500) F |
|||||
Therefore:
1. Fixed manufacturing overhead cost capacity = Rs ($7,500) favorable
2. Variable manufacturing overhead efficiency and spending variable:
(a) Efficiency variance = ($ 1,000) favorable
(b) Spending variance = ($2,200) unfavorable
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2065 Modified
Following information is provided by ABC Manufacturing Company:
Budgeted standard data
|
Budgeted activity level |
10,000 DLH at 2 hours per unit |
|
|
Standard labour hours allowed |
|
|
|
Budgeted overhead cost |
Variable |
$2.60 |
|
|
Fixed |
$1.40 |
|
|
|
Total 4.00 |
|
|
|
|
|
Hourly overhead application rate |
Variable |
$1.30 |
|
(standard rate) |
Fixed |
$0.70 |
|
|
|
Total 2.00 |
|
|
|
|
|
Budgeted overhead cost |
Variable |
$13,000 |
|
|
Fixed |
$7,000 |
|
|
|
Total 20,000 |
Actual data
|
Actual overhead cost incurred |
Variable |
$14,500 |
|
|
Fixed |
$ 7,500 |
|
|
|
Total 22,000 |
|
Actual labour hours used |
11,800 hours |
|
|
Actual production volume |
5,500 units |
|
Require: Overhead three variances
[Answer: SV = ($340) F; EV = $1,040 U; CV = ($700) F;
*SQ = 5,500 units × 2 hours per units = 11,000 DLH
SOLUTION
Given and working note:
|
Base budgeted units |
= 10,000 units |
|
|
||||||
|
Standard labour hours |
= 2* hours per unit |
|
|
||||||
|
Hourly overhead rate (SR) |
= FC + VC |
= 0.7 + 1.3 |
= $2 |
||||||
|
Budgeted or standard fixed cost (FC) |
= Rs 7,000 |
|
|
||||||
|
Actual expenses incurred |
= Actual FC + Actual VC |
= 7,500 + 14,500 |
= $22,000 |
||||||
|
Actual labour hours used (AQ) |
= 11,800 DLH |
|
|
||||||
|
Actual production (SQ) |
= 5,500 units x 2* HPU |
= 11,000 DLH |
|
||||||
|
Again |
|||||||||
|
O1 |
Actual overhead incurred |
7,500 + 14,500 |
22,000 |
||||||
|
O2 |
Standard FC + VCPU x AQ |
7,000 + 1.3 x 11,800 DLH |
22,340 |
||||||
|
O3 |
Standard FC + VCPU x SQ |
7,000 + 1.3 x 11,000 DLH |
21,300 |
||||||
|
O4 |
SR x SQ |
2 x 11,000 DLH |
22,000 |
||||||
|
|
|||||||||
|
Now |
|||||||||
|
1. Overhead spending variance |
= O1 – O2 |
= 22,000 – 22,340 |
= ($340) F |
||||||
|
2. Overhead efficiency variance |
= O2 – O3 |
= 22,340 – 21,300 |
= $1,040 U |
||||||
|
3. Overhead capacity variance |
= O3 – O4 |
= 21,300 – 22,000 |
= ($700) F |
||||||
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
TU: 2065 Modified
The costs of two different level of output are as follows:
|
Particulars |
Amount for 25,000 units |
Amount for 35,000 units |
|
|
Direct materials |
50,000 |
70,000 |
|
|
Direct labour |
25,000 |
35,000 |
|
|
Direct expenses |
25,000 |
35,000 |
|
|
Depreciation |
6,000 |
6,000 |
|
|
Insurance |
4,000 |
4,000 |
|
|
Supervision |
14,500 |
19,500 |
|
Required: flexible budget for 28,000 units and 30,000 units
[Answer: Variable cost: $126,000 and $135,000; Fixed cost = $12,000;
Total cost = $138,000 and $147,000]
SOLUTION
Calculation for 25,000 units
|
Activities |
Cost basis |
Variable cost |
Fixed cost = Total cost – Variable cost |
|
|
|
|
Per unit |
Total |
|
|
Direct materials |
Variable |
2.00 |
50,000 |
– |
|
Direct labour |
Variable |
1.00 |
25,000 |
– |
|
Direct expenses |
Variable |
1.00 |
25,000 |
– |
|
Depreciation |
Fixed |
– |
– |
6,000 |
|
Insurance |
Fixed |
– |
– |
4,000 |
|
Supervision |
Semi-variable |
0.50 |
12,500 |
14,500 – 12,500 = 2,000 |
Again
|
Variable cost per unit |
= Difference in cost ÷ Difference in output |
|
Supervision |
= ($19,500 – $14,500) ÷ (35,000 units – 25,000 units) = $0.50 |
|
|
|
|
Fixed cost (a) |
= y – bx |
|
|
= $14,500 – $0.50 x 25,000 units |
|
|
= $2,000 |
Flexible Budget
XYZ Company
For 28,000 DLH and 30,000 DLH
|
Particulars |
25,000 DLH |
28,000 DLH |
30,000 DLH |
|
|
Variable cost: |
|
|
|
|
|
Direct materials |
Output @ $2.0 |
50,000 |
56,000 |
60,000 |
|
Direct labour |
Output @ $1.0 |
25,000 |
28,000 |
30,000 |
|
Direct expenses |
Output @ $1.0 |
25,000 |
28,000 |
30,000 |
|
Supervision |
Output @ $0.5 |
12,500 |
14,000 |
15,000 |
|
Total variable cost (A) |
112,500 |
126,000 |
135,000 |
|
|
Fixed cost: |
|
|
|
|
|
Depreciation |
6,000 |
6,000 |
6,000 |
|
|
Insurance |
4,000 |
4,000 |
4,000 |
|
|
Supervision |
2,000 |
2,000 |
2,000 |
|
|
Total fixed cost (B) |
12,000 |
12,000 |
12,000 |
|
|
Budgeted total cost (A+B) |
124,500 |
138,000 |
147,000 |
|
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