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Hemberger Corporation currently produces baseball caps in an automated process. Expected production per month is 20,000 units, direct material costs are $1.50 per unit, and fixed manufacturing overhead costs are $23,000 per month. Manufacturing overhead is allocated based on units of production. What is the flexible budget for 10,000 and 20,000 units, respectively?

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jepessoa

Answer:

Flexible budget for 10,000 units = $38,000

Flexible budget for 20,000 units = $53,000

Explanation:

Hemberger's flexible budget for producing 10,000 and 20,000 units:

                                                              10,000 units      20,000 units

direct materials ($1.50 per unit)           $15,000             $30,000

fixed manufacturing overhead            $23,000            $23,000    

total flexible budget                            $38,000            $53,000

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