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Problem - Baker charges its customers $60 per hour. The chief operating officer expected that the company would provide 40,000 hours of service to clients. However, the vice president for marketing argues that the actual number of hours may range from 36,000 to 44,000 hours. Baker's standard variable cost is $32.50 per hour, and its standard fixed cost is $750,000.
Required - Show your work if you want partial credit. Prepare flexible budgets for 36,000, 40,000, and 44,000 hours.
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