A graph of a flexible budget formula reflects fixed costs of $45,000 per month and total costs of $100,000 at a volume of 5,000 units.Assuming the relevant range is 1,000 to 20,000 units,the graph would reflect total monthly costs at 15,000 units of what dollar amount?
A)$210,000
B)$100,000
C)$345,000
D)$165,000

Question

Quizplus · Accepted Answer

A)
Total costs $100,000
Fixed costs $(45,000)
Variable costs $55,000
Initial volume 5,000
Variable cost per unit $11 = 55,000 / 5,000
Variable cost per unit $11
Target units 15,000
Variable costs at target volume $165,000 = 15,000 × 11
Fixed costs + 45,000
Total costs at target volume $210,000

A Graph of a Flexible Budget Formula Reflects Fixed Costs