Flexible Budgeting-Manufacturing Costs

Essay

Flexible budgeting-manufacturing costs.As a result of studying past cost behavior and adjusting for expected price increases in the future,Gavin Company estimates that its manufacturing costs will be as follows:

Required:
Gavin uses these estimates for planning and control purposes.
a.Gavin expects to produce 20,000 units during the next period.Prepare a schedule of the expected manufacturing costs.
b.Suppose that Gavin produces only 16,000 units during the next period.Prepare a flexible budget of manufacturing costs for the 16,000-unit level of activity.
c.Suppose that Gavin produces 25,000 units during the next period.Prepare a flexible budget of manufacturing costs for the 25,000-unit level of activity.
(Gavin Company;flexible budgeting-manufacturing costs. )