A company's flexible budget for 12,000 units of production showed sales,$48,000; variable costs,$18,000; and fixed costs,$16,000.The variable costs expected if the company produces and sells 16,000 units is:

Question

Quizplus · Accepted Answer

Variable costs change in direct proportion to the level of production. If variable costs are $18,000 for 12,000 units, then for 16,000 units, the variable costs would be ($18,000 / 12,000) * 16,000 = $24,000.

A Company's Flexible Budget for 12,000 Units of Production Showed