Chimes Limited has prepared a flexible budget for one of its factories for the year to 30 June 2012. The details are as follows:

Additional information:
1. The company only expects to operate at a capacity of 45%. At that capacity, the sales revenue has been budgeted at a level of £135,500.
2. Variable costs per unit are not expected to change, irrespective of the level of activity.
3. Fixed costs are also not likely to change, irrespective of the level of activity.

Required:
Prepare a flexible budget for the year to 30 June 2012 based on an activity level of45%.

Transcribed Image Text:

% of production capacity 30% £000 42 18 50% £000 70 30 30 23 16 169 40% £000 56 Direct materials Direct labour Factory overhead Administration overhead Selling and distribution overhead 60% £000 84 36 34 26 18 198 26 20 14 140 17 12