Crane Corporation€™s master (static) budget for the year is shown below:

Required

1. During the year, the company manufactured and sold 55,000 units of product. Prepare an Excel spreadsheet that contains a flexible budget for this level of output. Round all budget figures to nearest whole dollar.

2. Now suppose that the actual level of output was 65,000 units. Rerun your spreadsheet to generate a flexible budget for this output level. Round all budget figures to the nearest whole dollar.

3. Of what relevance is the notion of the €œrelevant range€ when preparing pro forma budgets or a flexible budget for control purposes?

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$1,860,000 Sales (60,000 units) Cost of goods sold: $168,000 450,000 Direct materials Direct labor Overhead (variable overhead applied at 40% of direct labor cost) Gross profit Selling expenses: Sales commissions (all variable) Rent (all fixed) Insurance (all short-term fixed) General expenses: Salaries (all short-term fixed) Rent (all short-term fixed) Depreciation (all short-term fixed) Operating income 240,000 858,000 $1,002,000 $167,400 40,000 30,000 92,000 77,000 50,000 456,400 $ 545,600