Q$8(20)$

Moghale Pty Ltd produces at different capacity levels. The following details are

in relation to a productivity $5,000$ units which were at a $50\%$ capacity.

Cost per unit $($$$)$

Raw material

$75$

Direct labour

$40$

Direct expenses

$15$

Other expenses

Factory expenses $(50\%$ fixed$),$$$50,000$

Administration Expenses $(40\%$ fixed, $60\%$ variable$)$ $$60,000$

a$)$ From the information above, you are required to prepare a flexed budget

based on $70\%$ and $100\%$ capacity.

$[15$ marks$]$

b$)$ What are the differences between a fixed budget and a flexed budget?

$[5$ marks$]$