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QUESTION 6 On a piece of scrap paper prepare a flexible budget for 5,000, 6,000, and 7,000 units of output. Use the following

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Answer #1

Solution:

Budgeted cost of 5000 units = Variable costs + Fixed costs

= ($4 + $2 + $3) * 5000 + $40,000

= $85,000

Hence 3rd option is correct.

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