Gordon knits wool caps for sale at the local ski
Gordon knits wool caps for sale at the local ski resorts. He prepared the following budget for the production and sale of 150 wool caps. Unfortunately, Gordon fell ill with a bad case of the flu and was able to make and sell only 125 wool caps.
Sales revenue ........ $1,500.00
Variable costs:
Direct materials (yarn) ..... 375.00
Direct labor ........... 750.00
Commission to resort ..... 112.50
Fixed costs ......... 75.00
Net income ......... $187.50

Required
Prepare a flexible budget for Gordon based on the production and sale of 125 wool caps.

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