Preparing an Activity Flexible Budget

40,000 units
Driver : Machine Hours
Fixed Variable 60,000
Maintenance 50,000 1.8 158,000
Machining 25,000 3 205,000
Subtotal 75,000 4.8 363,000

Driver : Number of Setups

Fixed Variable 50
Setups _ 2,100 105,000
Subtotal _ 2,100 105,000

Driver : Number of Purchase Orders

Fixed Variable 12,000
Purchasing 75,000 7 159,000
Subtotal 75,000 7 159,000

TOTAL 627,000

Maintenance :

at 60,000 machine hours

50,000 + ( 1.80 x 60,000 ) = 158,000

at 90,000 machine hours

50,000 + ( 1.80 x 90,000) = 212,000

Machining :

at 60,000 machine hours

25,000 + ( 3.00 x 60000 ) = 205,000

at 90,000 machine hours

25,000 + ( 3.00 x 90,000 ) = 295,000

Setting up

at 50 setups
2,100 x 50 = 105,000

at 70 setups
2,100 x 70 = 147,000

Purchasing :

at 12,000 purchase orders

75,000 + ( 7.00 x 12,000 ) = 159,000

at 18,000 purchase orders

75,000 + ( 7.00 x 18,000 ) = 201,000
60,000 units

90,000
212,000
295,000
507,000

70
147,000
147,000

18,000
201,000
201,000

855,000