Flexible Budgeting-Manufacturing Costs

question 89

Essay

Flexible budgeting-manufacturing costs.As a result of studying past cost behavior and adjusting for expected price increases in the future,Gavin Company estimates that its manufacturing costs will be as follows:

Required:
Gavin uses these estimates for planning and control purposes.
a.Gavin expects to produce 20,000 units during the next period.Prepare a schedule of the expected manufacturing costs.
b.Suppose that Gavin produces only 16,000 units during the next period.Prepare a flexible budget of manufacturing costs for the 16,000-unit level of activity.
c.Suppose that Gavin produces 25,000 units during the next period.Prepare a flexible budget of manufacturing costs for the 25,000-unit level of activity.
(Gavin Company;flexible budgeting-manufacturing costs. )

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Definitions:

Compulsion

The psychological need to perform certain behaviors repeatedly or according to certain rules, often against one’s own wishes.

Obsession

A persistent, intrusive, and unwanted thought, urge, or image that causes significant anxiety or distress.

Behavior

Any overt (observable) response or activity by an organism.

Compulsive Behavior

A pattern of behavior where an individual feels compelled to perform certain actions repeatedly, often without rational motivation, to alleviate anxiety or distress.