McElroy Company has prepared the following master budget for 2019. Although McElroy has the capacity to manufacture 50,000 units, management expected the likely demand for its product to be 40,000 units in 2019; as such, it prepared the master budget to manufacture and sell 40,000 units. In early January 2020, the company was pleasantly surprised to find out that it manufactured and sold 45,000 units in 2019.Required:
Prepare the flexible budget (FB) for the actual operating level achieved in 2019.

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The Answer of McElroy Company has prepared the following master budget for 2019. Although McElroy has the capacity to manufacture 50,000 units, management expected the likely demand for its product to be 40,000 units in 2019; as such, it prepared the master budget to manufacture and sell 40,000 units. In early January 2020, the company was pleasantly surprised to find out that it manufactured and sold 45,000 units in 2019.Required:
Prepare the flexible budget (FB) for the actual operating level achieved in 2019.

McElroy Company Has Prepared the Following Master Budget for 2019