Flat Company currently produces cardboard boxes in an automated process.Expected produc?tion per month is 40,000 units.The required direct materials cost $0.30 per unit.Manufacturing fixed overhead costs are $24,000 per month.Manufacturing overhead is allocated based on units of production.____ is the flexible budget for 40,000 and 20,000 units, respectively.
A)$26,000 and $20,000
B)$36,000 and $30,000
C)$40,000 and $34,000
D)$44,000 and $38,000

Question

Quizplus · Accepted Answer

To calculate the flexible budget, we need to break down the fixed and variable costs.

Variable Manufacturing Cost per Unit = Direct Materials Cost = $0.30

Total Fixed Manufacturing Overhead = $24,000

Flexible Budget for 40,000 units:

Direct Materials Cost = 40,000 x $0.30 = $12,000

Manufacturing Overhead = ($24,000 / 40,000) x 40,000 = $24,000

Total Cost = $12,000 + $24,000 = $36,000

Flexible Budget for 20,000 units:

Direct Materials Cost = 20,000 x $0.30 = $6,000

Manufacturing Overhead = ($24,000 / 40,000) x 20,000 = $12,000

Total Cost = $6,000 + $12,000 = $18,000

Therefore, the correct choice is B) $36,000 and $30,000.

Flat Company Currently Produces Cardboard Boxes in an Automated Process