expected results for several activity levels. U, U JIC UI Slalu Duugers for different le activity. To illustrate, a flexible budget for the Assembly Department of Colter Manufacturing Cc is shown in Exhibit 5. Exhibit 5 Flexible Budget D Level 3 10,000 - Step 1 A To 1 Colter Manufacturing Company 2 Assembly Department Budget 3 For the Year Ending July 31, 20Y8 4 Level 1 Level 2 5 Units of production 8,000 9,000 6 Variable cost: 7 Direct labor ($5 per unit) $40,000 $45,000 8 Electric power ($0.50 per unit) 4,000 4,500 9 Total variable cost $44,000 $49,500 10 Fixed cost: 11 $ 1,000 $ 1,000 12 Supervisor salaries 15,000 15,000 13 Total fixed cost $ 16,000 $16,000 14 Total department costs $60,000 $65,500 15 0 0 Step 2 $50,000 5,000 $55,000 Electric power $ 1,000 15,000 $16,000 $71.000 5 Step 3 1. Flexible Budget for Selling and Administrative Expenses for a Service Company Digital Solutions Inc. uses flexible budgets that are based on the following data: Sales commissions 8% of sales Advertising expense 15% of sales Miscellaneous administrative expense $10,000 per month plus 4% of sales Office salaries expense $50,000 per month Customer support expenses $20,000 per month plus 30% of sales Research and development expense $75,000 per month Prepare a flexible selling and administrative expenses budget for October for sales volumes of $500,000, $750,000, and $1,000,000. (Use Exhibit 5 as a model.) Digital Solutions Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending October 31 Total sales $500,000 $750,000 $1,000,000 Variable cost: $- Select - $- Select $- Select - Select - Select - Select- Select Select - Select - Select - Select - Select - Total variable cost $fill in the blank 17 $fill in the blank 18 $fill in the blank 19 Fixed cost: $- Select $- Select- $- Select Select Select Select- + Select - Select - - Select - Select - Select - - Select - Total fixed cost $fill in the blank 36 $fill in the blank 37 $fill in the blank 38 Total selling and administrative expenses $fill in the blank 39 $fill in the blank 40 $fill in the blank 41