If the master budget prepared at a volume level of 10,000 units includes direct labor of $10,000,a flexible budget based on a volume of 11,000 units would include direct labor of $10,000.

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Quizplus · Accepted Answer

A flexible budget adjusts costs based on changes in volume, so if the volume increases from 10,000 to 11,000 units, the direct labor cost would also increase proportionally, assuming direct labor is a variable cost.

If the Master Budget Prepared at a Volume Level of 10,000