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25 July, 19:15

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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  1. 25 July, 20:05
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    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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