Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 19

Flexible Budget

Required

Given the data shown in the graph, what are the following:

a. Budgeted fixed cost per period?

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b. Budgeted variable cost per unit?

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c. Value of F (that is, the flexible budget for an activity level of 8,000 units)?

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d. Flexible budget cost amount if the actual activity had been 16,000 units?

Step 1 of 5

Flexible budget

The budgeted costs, revenues, and profit are reported by the flexible budget for effectively all possible level of activities. The revenues and variable costs at each activity level are budgeted to be different in the flexible budget because these amounts change with the activity levels.