Metaz Company expects to produce an average of 10,000 units. The company expects to operate at 10,000 direct labor hours each month. Monthly production is expected to range from 10,000 units to 11,000 units.
Budgeted variable manufacturing costs per unit are direct materials at $5, direct labor at $6, and manufacturing overhead at $8. The monthly budgeted fixed manufacturing costs for depreciation are $20,000, and for supervision, it is $10,000.
Required: Prepare a flexible budget for the levels of 10,000 units and 11,000 units.
Metaz Company Monthly Flexible Manufacturing Budget
Activity-level (finished products)
10,000 units 11,000 units