# 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 =...

See full answer below.

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Chapter 23 / Lesson 7Understand 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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