Grenada Company Estimates Sales of 15,000 Units for the Upcoming

question 4

Essay

Grenada Company estimates sales of 15,000 units for the upcoming period.At this sales volume its budgeted income is as follows:
$\begin{array}{lcc}&\text {Per Unit}&\text {Total}\\\text { Sales } & \$ 60 & \$ 900,000 \\\text { Less variable costs: } & & \\\text { Manufacturing costs } & 30 & 450,000 \\\text { Selling and administrative costs } & \underline{10 }& \underline{ 150,000} \\\text { Contribution margin } & \$ 20 & \$ 300,000 \\\text { Less fixed costs: } & & \\\text { Manufacturing costs } & & 125,000\\\text { Selling and administrative costs } && \underline{ 155,000} \\\text { Net income } && \underline{\$ 20,000}\end{array}$

During the period the company actually produced and sold 18,000 units.
Required:
Prepare a flexible budget based on 18,000 units.

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Definitions:

Monitor

To observe and check the progress or quality of something over a period of time; or a device used for observing, checking, or keeping a continuous record of a process or quantity.

Operant Behavior

A behavior that is influenced by the consequences that follow it, such as rewards or punishments, based on the principles of operant conditioning.

Associative Learning

The process by which an association between two stimuli or a behavior and a stimulus is learned.

Classical

Often referring to traditions or styles established over a long period in literature, music, art, or architecture, emphasizing qualities of balance, harmony, and restraint.