Question

Adarmes Adventures manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets: 2,500 canoes, 3,000 canoes, and 3,500 canoes. Canoes sell for $800 each. The standard variable cost information for a canoe is as follows.
Direct materials ... $300
Direct labor ...... 150
Variable overhead
Utilities ...... 35
Indirect material ... 30
Indirect labor ..... 60
Total........ $575

Annual fixed overhead cost is expected to be:
Maintenance ...... $ 20,000
Depreciation ...... 40,000
Insurance ........ 27,000
Rent............ 30,000
Total........... $117,000

Required

Prepare a flexible budget for the three sales levels under consideration.



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  • CreatedFebruary 21, 2014
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