The expenses budgeted for production of 10,000 units in a factory are furnished as follows:

Particulars Per unit (Rs.)

Materials 70
Labour 25
variable overheads 20
Fixed overheads (Rs. 100000) 10
Variable expenses (Direct) 5
Selling Expenses (10% Fixed) 13
Distribution Expenses (20% Fixed) 7
Administrative Expenses (₹ 50000) (100% Fixed) 5
Total 155
Prepare a budget for production of:
6000 units, 8000 units and 10000 units showing variable cost, fixed cost in amount and cost
per unit at each level of production.
follows:
Flexible production cost budget
Units 6000 8000
Particulars CPU Total cost CPU Total cost
Variable costs:
Materials 70 420000 70 560000
Labour 25 150000 25 200000
Variable overhead 20 120000 20 160000
Variable Expenses 5 30000 5 40000
Selling Expenses 11.7 70200 11.7 93600
and cost Distribution expenses 5.6 33600 5.6 44800
Total Variable cost 137.3 823800 137.3 1098400
Fixed Costs
Selling expenses 2.17 13000 1.63 13000
Distribution expenses 2.33 14000 1.75 14000
Administration Expenses 8.33 50000 6.25 50000
Fixed overhead 16.67 100000 12.5 100000
Total Fixed cost 29.5 177000 22.13 177000
Total Costs 166.8 1000800 159.43 1275400
t
10000
CPU Total cost

70 700000
25 250000
20 200000
5 50000
11.7 117000
5.6 56000
137.3 1373000

1.3 13000
1.4 14000
5 50000
10 100000
17.7 177000
155 1550000
Based on the information is provided at production level of 10000 Units,
prepare Flexible budget for Production levels of 10,000, 12,500 and 15,000
Units indicating total and per unit cost, contribution, sales and profit levels.
• Raw Material cost per unit Rs. 28
• General Fixed Cost Rs. 9,00,000
• Administration Cost Rs. 80,000 (40% fixed)
• Maintenance Costs Rs. 1,20,000 (75% variable)
• Direct Wages Rs. 12 per unit
• Machine Hours run 1.5 hours per unit at rate of Rs. 2 per hour
• Fixed administrative expense is Rs. 2,50,000.
It is expected to increase by Rs. 75,000 if production crosses 12,000
units.What will be the Break- Even Point at each capacity level, if Selling
Price is Rs. 190 per Unit.?
Statement of Flexible Budget

Particulars Capacity Levels

10000 12500 15000
Variable Costs:
Raw material 280000 350000 420000
Administration cost 48000 60000 72000
Maintenance cost 90000 112500 135000
Direct wages 120000 150000 180000
Machine charges 30000 37500 45000
Total 568000 710000 852000

Fixed Costs:
General Fixed Cost 900000 900000 900000
Administration 32000 32000 32000
Maintenance 30000 30000 30000
Fixed Administrative expenses 250000 325000 325000
Total 1212000 1287000 1287000

Total cost 1780000 1997000 2139000

Profit 120000 378000 711000
Sales 1900000 2375000 2850000

SP p.u 190 190 190

VC p.u 56.8 56.8 56.8
Contribution p.u 133.2 133.2 133.2
Fixed cost 1212000 1287000 1287000
BEP in units 9099 9662 9662
 Flexible production cost budget
Level of Activity 60% 70% 90%
Units 6000 7000 9000
Particulars CPU Total cost CPU Total cost CPU
Variable costs:
Materials 15 90000 15.75 110250 16.2
Labour 4 24000 4 28000 4
Variable Factory overhead 9 54000 9 63000 9
Variable Adminimstrative ove 2 12000 2 14000 2
Total Variable cost 30 180000 30.75 215250 31.2
Fixed Costs
Factory Overheads 6 36000 5.142857 36000 4
Administration Overheads 3 18000 2.571429 18000 2
Total Fixed cost 9 54000 7.714286 54000 6
Total Costs 39 234000 38.46429 269250 37.2
Profit 11 66000 10.53571 73750 10.3
Sales 50 300000 49 343000 47.5
90%
9000
Total cost

145800 A factory is currently running at 6

36000 is given below:
Material Rs. 15
81000 Labour Rs. 4
Factory overheads Rs. 15 per
18000 Administrative overheads Rs. 5
280800
The current selling price is Rs. 50
At 70% working, Material cost pe
36000 At 90% working, material cost pe
Prepare flexible budget showing
18000 comments.
54000
334800
92700
427500
y is currently running at 60% capacity and produces 6000 units. The cost per unit details
below:
Rs. 15
Rs. 4
overheads Rs. 15 per unit (Rs. 6 fixed )
trative overheads Rs. 5 (Rs. 3 fixed)

ent selling price is Rs. 50 per unit.

working, Material cost per unit increases by 5% and selling price per unit falls by 2%.
working, material cost per unit increases by 8% and selling price per unit falls by 5%.
flexible budget showing profits of the factory at 70%, 90% working and offer your
nts.