Hi, i'm having problems with flexed budgets. In the answer to this question below, it says that the flexed budget for direct materials is £5,600, for direct labour £5,320, and overheads £10,080.

Can anyone please explain how you get those answers so i can understand it a little better?

thanks very much.

Here's the question in my book:

Victor Ltd is preparing its budget for the next quarter and it needs to consider different production levels. The semi variable costs should be calculated using the high low method.

If 3,000 batches are produced then the semi-variable cost will be £8,500.

Complete the table below and calculate the estimated profit per batch at the different activity levels.

                                                          Budget            Actual

Volume sold                                        1,000             1,400

Sales Revenue                                    £40,000          £60,000

Less Costs:

Direct Materials                                  £4,000            £6,000

Direct Labour                                     £3,800            £5,300

Overheads                                         £7,200            £10,100

Semi variable costs                            £4,500            £5,500

Fixed Cost                                          £3,500            £3,500

Total Profit                                         £17,000          £29,600