Balmer Corporation's Master Budget for the Year Is Presented Below

Essay

Balmer Corporation's master budget for the year is presented below: During the period, the company manufactured and sold 42,000 units.
Required:
1. Prepare a flexible budget (FB) for the actual output level achieved during the period.
2. What is the definition of a FB? For what managerial purpose is a FB useful? Be specific about the types of information (and variances) that management can generate, at the end of an accounting period, given a flexible budget and its master (static) budget.