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

Exercise 16

Flexible Budgeting

The master budget at Windsor, Inc., last period called for sales of 90,000 units at $36 each. The costs were estimated to be $15 variable per unit and $900,000 fixed. During the period, actual production and actual sales were 92,000 units. The selling price was $36.45 per unit. Variable costs were $17.70 per unit. Actual fixed costs were $900,000.

Required

Prepare a flexible budget for Windsor.

Step 1 of 2

Flexible budget for company W is shown below

Thus, budgeted operating income of company is $1,032,000.