Beal Manufacturing Co.'s static budget at 12000 units of production includes $72000 for direct labor and $12000 for direct materials. Total fixed costs are $48000.
Instructions
a. Determine how much would appear on Beal's flexible budget for 2016 if 18000 units are produced and sold.
b. How would this comparison differ if a static budget were used instead of a flexible budget for performance evaluation?

Question

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The Answer of Beal Manufacturing Co.'s static budget at 12000 units of production includes $72000 for direct labor and $12000 for direct materials. Total fixed costs are $48000.
Instructions
a. Determine how much would appear on Beal's flexible budget for 2016 if 18000 units are produced and sold.
b. How would this comparison differ if a static budget were used instead of a flexible budget for performance evaluation?