the manager of a business has budgeted to produce 600 000 units of output in 2017 th 611300

The manager of a business has budgeted to produce 600,000 units of output in 2017. The standard quantities for this budgeted output level are as follows:

Materials (metal)	450,000 m2
Materials (fabric)	200,000 m2
Labour	50,000 hours

If actual output fell short of budgeted levels and was 40 per cent less than expected, at 360,000 units of output, we should ‘flex’ these standard quantities to match the actual output level. This will mean reducing the standard quantities by 40 per cent, which gives us the following:

Materials (metal)	270,000 m2
Materials (fabric)	120,000 m2
Labour	30,000 hours