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julsineya [31]
3 years ago
10

Based on a predicted level of production and sales of 15,000 units, a company anticipates reporting operating income of $22,000

after deducting variable costs of $75,000 and fixed costs of $8,000. Based on this information, the budgeted amounts of fixed and variable costs for 18,000 units would be:
Business
1 answer:
Arisa [49]3 years ago
5 0

Answer:

Total variable cost= 90,000

Total fixed costs= 8,000

Total costs= $98,000

Explanation:

Giving the following information:

Production of 15,000 units:

Fixed costs= $8,000

Total variable cost= $75,000

We have no reason to believe that the fixed costs will change. If 18,000 units remain in the relevant range, the fixed costs are constant.

<u>We need to calculate the unitary variable cost:</u>

Unitary variable cost= 75,000/15,000= $5

Now, for 18,000 units:

Total variable cost= 5*18,000= 90,000

Total fixed costs= 8,000

Total costs= $98,000

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