Question

McCabe Manufacturing Co.'s budget at 8,000 units of production includes $40,000 for direct labor and $4,000 for electric power. Total fixed costs are $23,000. At 10,000 units of production, a flexible budget would show: Group of answer choices variable costs of $44,000 and $23,000 of fixed costs variable costs of $55,000 and $23,000 of fixed costs variable costs of $49,500 and $23,000 of fixed costs variable costs of $40,000 and $27,000 of fixed costs

Answer 1

Answer: variable costs of $49,500 and $23,000 of fixed costs

Explanation:

A flexible budget refers to the budget which adjusts to the volume levels of a company.

Based on the information given in the question, the variable cost will be:

= (44000/8000) x 90000

= $49500 variable

On the other hand, the fixed cost has been given as $23000.

Therefore, the flexible budget would show variable costs of $49,500 and $23,000 of fixed costs.