Adarmes Adventures manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets: 1,000 canoes, 1,500 canoes, and 2,000 canoes. Cairo. sell for $650 each. TM standard variable cost information for a canoe is as follows.
|
Direct materials |
$225 |
|
Direct labor |
110 |
|
Variable overhead |
|
|
Ulilities |
15 |
|
Indirect material |
45 |
|
Indirect labor |
30 |
|
Total |
$425 |
|
Annual fixed overhead cost Is expected to be: |
|
|
Maintenance |
$ 45,000 |
|
Depreciation |
36,000 |
|
Insurance |
28,000 |
|
Rent |
57,000 |
|
Total |
$166,000 |
Required
Prepare a flexible budget for the three sales levels under consideration.
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