A company’s flexible budget for 10,000 units of production showed sales, $56,000; variable costs, $24,000; and...
A company’s flexible budget for 10,000 units of production showed sales, $56,000; variable costs, $24,000; and fixed costs, $16,000. The variable costs expected if the company produces and sells 16,000 units is:
Multiple Choice
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$56,000.
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$72,000.
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$54,400.
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$38,400.
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$24,000
Homework Answers
variable cost per unit=$24,000/10,000
=$2.4 per unit
Hence variable costs at 16,000 unit=16000*$2.4 per unit
=$38400
NOTE:Total fixed costs and variable cost per unit do not change with change in units
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