Flexible budgeting-manufacturing costs. As a result of studying past cost behavior and adjusting for expected price increases in the future, Nicholson Company estimates that its manufacturing costs will be as follows:Direct Materials $10.00 per UnitDirect Labor $6.00 per UnitManufacturing Overhead:Variable $3.00 per UnitFixed $100,000 per PeriodNicholson uses these estimates for planning and control purposes.a. Nicholson expects to produce 20,000 units during the next period. Prepare a schedule of the expected manufacturing costs.b. Suppose that Nicholson produces only 1 6,000 units during the next period. Prepare a flexible budget of manufacturing costs for the 1 6,000-unit level of activity.c. Suppose that Nicholson produces 25,000 units during the next period. Prepare a flexible budget of manufacturing costs for the 25,000-unit level of activity.
