McElroy Company has prepared the following master budget for 2010.Although McElroy has the capacity to manufacture 50,000 units,management expected the likely demand for its product to be 40,000 units in 2010;as such,it prepared the master budget to manufacture and sell 40,000 units.In early January 2011,the company was pleasantly surprised to find out that it manufactured and sold 45,000 units in 2010.

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The Answer of McElroy Company has prepared the following master budget for 2010.Although McElroy has the capacity to manufacture 50,000 units,management expected the likely demand for its product to be 40,000 units in 2010;as such,it prepared the master budget to manufacture and sell 40,000 units.In early January 2011,the company was pleasantly surprised to find out that it manufactured and sold 45,000 units in 2010.

McElroy Company Has Prepared the Following Master Budget for 2010