Question

Based on predicted production of 26,000 units, a company anticipates $507,000 of fixed costs and $448,500 of variable costs. The flexible budget amounts of fixed and variable costs for 24,000 units are:___________.a) $468,000 fixed and $414,000 variable.b) $414,000 fixed and $507,000 variable.c) $468,000 fixed and $448,500 variable.d) $507,000 fixed and $448,500 variable.e) $507,000 fixed and $414,000 variable.

Answer 1

Answer:

The correct answer is B.

Explanation:

Giving the following information:

26,000 units:

Total variable costs= $448,500

Fixed costs= $507,000

First, we  need to determine the unitary variable cost:

Unitary variable cost= 448,500/26,000

Unitary variable cost= $17.25

Now, the total cost for 24,000 units:

Total variable cost= 24,000*17.25= $414,000

Total fixed cost= $507,000

Total cost= $921,000