A ltd. Produce a standard product. The estimated cost per unit in given below Rs Raw materials 10 Direct wages 8 Direct expenses 2 Variable overheads 5 Fixed overhead is estimated to Rs.70,000 selling price per unit is Rs .40. Prepare a flexible budget at 50%, 70%, and 90% level of activity. Assume the output at 100% level of activity is 10,000 units. The following expenses relate to a cost center operating at 80% of normal capacity (Sales are Rs.1,20,000) Draw up flexible Administration, Selling and Distribution cost budget operating at 90%, 100% and 110% of normal capacity Administration cost Office Salaries Rs 3,000 General expenses Rs. 1.5% of Sales Depreciation Rs, 1,500 Rates and taxes Rs 1,750 Selling costs Salaries 4% of sales Travelling expenses 1.5% of sales Sales office expenses 1% of sales General expenses 1% of sales Distribution cost Wages Rs.3,000 Rent 0.5% of sales Other expenses 2% of sales

• Overheads will remain unchanged and 

• Direct labor hours will increase by 331/3 Draw up a budget and compute factory overheads rate ,the overheads being absorbed on direct wages.

Answer rating: 100% (QA)

Flexible Budget At 100 level of activity 10000 units Total estimated cost per unit Rs 10825 Rs 25 Total fixed overheads Rs 70000 Total variable cost per unit Rs 10825 Rs 25 Total cost per unit Rs 2570... View the full answer