Burruss Company developed a static budget at the beginning of the company's accounting period based on an expected volume of 8,000 units: $$\begin{array} { l c }
& \text { Per Unit } \
\text { Revenue } & \$ 4.00 \
\text { Variable costs } & \underline{1.50} \
\text { Contribution margin } & \$ 2.50 \
\text { Fixed costs } & \underline{ 2.00} \
\text { Net incone } & \underline{\$ 0.50 }\

\end{array}$$ If actual production totals 10,000 units,which is within the relevant range,the flexible budget would show fixed costs of:
A) $16,000.
B) $2 per unit.
C) $20,000.
D) None of these answers are correct.

Question

Burruss Company developed a static budget at the beginning of the company's accounting period based on an expected volume of 8,000 units: $$\begin{array} { l c } 
& \text { Per Unit } \
\text { Revenue } & \$ 4.00 \
\text { Variable costs } &  \underline{1.50} \
\text { Contribution margin } & \$ 2.50 \
\text { Fixed costs } & \underline{ 2.00} \
\text { Net incone } &  \underline{\$ 0.50 }\

\end{array}$$ If actual production totals 10,000 units,which is within the relevant range,the flexible budget would show fixed costs of:
A) $16,000.
B) $2 per unit.
C) $20,000.
D) None of these answers are correct.

Quizplus · Accepted Answer

The Answer of Burruss Company developed a static budget at the beginning of the company's accounting period based on an expected volume of 8,000 units: $$\begin{array} { l c } 
& \text { Per Unit } \
\text { Revenue } & \$ 4.00 \
\text { Variable costs } &  \underline{1.50} \
\text { Contribution margin } & \$ 2.50 \
\text { Fixed costs } & \underline{ 2.00} \
\text { Net incone } &  \underline{\$ 0.50 }\

\end{array}$$ If actual production totals 10,000 units,which is within the relevant range,the flexible budget would show fixed costs of:
A) $16,000.
B) $2 per unit.
C) $20,000.
D) None of these answers are correct.

Burruss Company Developed a Static Budget at the Beginning of the Company's