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Payne Inc's master budget was based on a level of activity of producing and selling 75,000 electric clippers with a retail price of \$75 per unit. The company has the capacity to produce 100,000 units. Variable labor costs were budgeted to be \$1,406,250. Variable material costs were budgeted to be \$872,250 and variable overhead costs were budgeted to be \$1,462,500. Actual material costs incurred were \$1,013,500 on 90,000 units produced and sold.

What should the flexible budget material cost be under the new activity level?









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