Based on predicted production of 17,000 units, a company anticipates $255,000 of fixed costs and $216,750 of variable costs. The flexible budget amounts of fixed and variable costs for 15,000 units are (Do not round intermediate calculations):

fixed costs = $255,000

variable costs = (15,000 / 17,000) x $216,750 = $191,250

Explanation:

A flexible budget is prepared in order to compare how budgeted revenues and costs actually worked out. In other words, if actual revenues and costs were similar to the budget previously prepared. A flexible budget adjusts actual results and helps management control how efficient the company was in following their budget. That is why a flexible budget is done after the budgeted period is over.

Fixed costs should not change (that is why they are fixed), but variable costs should change if the actual output was different than the budgeted output.

so they can see what that city is producing and to also see if they can some how get that product. like gold in africa.