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Sarasota Possible Inc. (SP) is a manufacturer of toaster ovens. To improve control over operations, the president of SP wants to begin using a flexible budgeting system, rather than using only the current master budget. The following data are available for SP's expected costs at production levels of 97,200, 108,000, and 118,800 units.
Variable costs Manufacturing $7 per unit
Administrative $4 per unit
Selling $3 per unit
Fixed costs Manufacturing $172,800
Administrative $86,400
Problem (a) Prepare a flexible budget for each of the possible production levels: 97,200, 108,000, and 118,800 units.
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