Campbell, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. Campbell had the following budgeted data:
What is the difference in total budgeted costs between the volume range of 4,000 and 5,000 units?

A) £-0-
B) £18,550
C) £1,000
D) £9,000

Question

Campbell, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. Campbell had the following budgeted data:
What is the difference in total budgeted costs between the volume range of 4,000 and 5,000 units?

A) £-0- 
B) £18,550 
C) £1,000 
D) £9,000

Quizplus · Accepted Answer

To find the difference in total budgeted costs between the volume range of 4,000 and 5,000 units, we need to calculate the total variable cost for each volume level and subtract the lower from the higher. 
For 4,000 units: 
Variable cost per unit = £10 
Total variable cost = 4,000 x £10 = £40,000

For 5,000 units: 
Variable cost per unit = £10 
Total variable cost = 5,000 x £10 = £50,000

The difference in total budgeted costs between the two volume levels is: 
£50,000 - £40,000 = £10,000

Therefore, the correct answer is B) £18,550 (since it is the only option that is close to the calculated difference of £10,000).