Jones Company developed the following static budget at the beginning of the company's accounting period: If actual production totals 8,200 units, the flexible budget would show total costs of:
A) $8,000.
B) $8,100.
C) $8,200.
D) None of these is correct.

Question

Jones Company developed the following static budget at the beginning of the company's accounting period:  If actual production totals 8,200 units, the flexible budget would show total costs of:
A) $8,000. 
B) $8,100. 
C) $8,200. 
D) None of these is correct.

Quizplus · Accepted Answer

Based on 8,200 units:
Total budgeted costs = Variable costs + Fixed costs
Total budgeted costs = ($4,000 ÷ 8,000 units × 8,200 units) + $4,000 = $8,100

Jones Company Developed the Following Static Budget at the Beginning