Question: Budgeted amounts for the year: Materials .......2 leather strips @ $3.00 Labor ..........0.5 hr. @ $12.00 Variable overhead .....0.5 hr. @ $1.00 Fixed overhead ......$4,500

Budgeted amounts for the year:

Materials .......2 leather strips @ $3.00

Labor ..........0.5 hr. @ $12.00

Variable overhead .....0.5 hr. @ $1.00

Fixed overhead ......$4,500


Required:

1. Prepare a flexible budget for 2,000, 3,000, and 4,000 units.

2. Calculate the unit cost at 2,000, 3,000, and 4,000 units. What happens to unit cost as the number of units produced increases?


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