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Lapp Manufacturing uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $400000 to $480000. Variable costs and their percentage relationships to sales are: Fixed selling expenses consist of sales salaries $80000 and depreciation on delivery equipment $20000.
Instructions
Prepare a flexible budget for increments of $40000 of sales within the relevant range.
Overhead Applied
The amount of overhead costs allocated to a particular cost object, such as a product, based on predetermined overhead rates.
Machining Department
A specific section within a manufacturing facility where machining operations are performed to produce parts.
Machine-Hours
A measure of the amount of time machines are used in the production process, often used as a basis for allocating overhead costs.
Overhead Applied
The portion of overhead costs allocated to a specific job or project based on a predetermined rate.
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