Based on the predicted production of 12,000 units, a company anticipates $150,000 of fixed costs...
Question:
Based on the predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000 units are:
a. $125,000 fixed and $123,000 variable.
b. $150,000 fixed and $123,000 variable.
c. $102,500 fixed and $150,000 variable.
d. $150,000 fixed and $102,500 variable.
e. $125,000 fixed and $102,500 variable.
Variable Cost:
Variable costs include those expenses that remain the same on a per-unit basis and move in direct proportion with the activity level. Business strive to have a lower variable cost percentage to increase their contribution margin ratio.
Answer and Explanation: 1
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View this answerThe correct option is (d) $150,000 fixed and $102,500 variable.
For, 12,000 units, it is given that -
- Fixed Costs = $150,000
- Variable Costs =...
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Variable Cost: Definition, Formula & Examples
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Chapter 23 / Lesson 7
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Understand variable cost in business. Learn the definition of variable cost, the variable cost formula, and how to use the formula to calculate the variable cost.
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