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extracts from flexible budgets of a manufacturing company are as follows
prodn and sales quantity 5000 units 7000units
budget cost allowance $000 $000
material costs 50 70
lab cost 65 77
prodn overhead 80 84
adm cost 35 35
selli and distribution 15 19
what would be total expenditure incuurred in a period when 6000 produced and 5500 units sold ?ans is 264000
i know
lab 6 p.u and prodn p u is 2 and selling is 2 p.u is semi variable high low is used
fixed cost admin 35+70+5
after this calculated for 6000 unit got total 265000 and for 5500 units 255000
after what to do sir ? to get 264000The variable production cost per unit is $18 (10 + 6 + 2)
So for 6,000 units produced, total production expense = 6,000 x 18 = 108,000The variable selling cost per unit is $2
So for 5,500 units sold, the total selling expense is 5,500 x 2 = 11,000The total fixed cost is 35,000 + 70,000 + 35,000 + 5,000 = 145,000
So total expense = 108,000 + 11,000 + 145,000 = 264,000
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