Based on a predicted level of production and sales of 22,000 units, a company anticipates total...
Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of fixed costs for 20,000 units would be:
$99,000.
$90,000.
$66,000.
$30,000.
$150,000.
Homework Answers
The budgeted amount of fixed costs for 20,000 units would be $30,000
-The Variable costs are those costs which are increase or decrease in proportion to the increases or decreases in the number of unit of production.
-Fixed cost will not change in proportion to the change in the number units, only the Variable cost will change in proportion to the change in the Volume of activity.
-Therefore, the budgeted amount of fixed costs for 20,000 units would be same as the total fixed cost for producing 22,000 units.
-Hence, the budgeted amount of fixed costs for 20,000 units would be $30,000.
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