E7-8 Preparing a flexible budget Using the following per-unit and total amounts, prepare a flexible budget at the 14,000-, 15,000-, and 16,000-unit levels of production and sales for Natural Products Inc.:

Selling price per unit............................................ $75.00

Direct materials per unit ........................................ $24.00

Direct labor per unit............................................. $7.50

Variable factory overhead per unit.............................. $15.00

Fixed factory overhead.......................................... $75,000

Variable selling and administrative expense per unit . . . . . . . . . . $12.00

Fixed selling and administrative expense ...................... $80,000

Use this format:

Exercise 7-8 Flexible Budget 14,000 Units 15,000 Units 16,000 Units Sales Less variable costs: Direct materials Direct labor Variable factory overhead Variable selling and administrative expense Total variable costs Contribution margin Less fixed costs: Fixed factory overhead Fixed selling and administrative expense Total fixed costs Operating income