Based on predicted production of 12,000 units,a company anticipates $150,000 of fixed costs and $123,000 of variable costs.The flexible budget amounts of fixed and variable costs for 10,000 units are:
A)$125,000 fixed and $102,500 variable.
B)$125,000 fixed and $123,000 variable.
C)$102,500 fixed and $150,000 variable.
D)$150,000 fixed and $123,000 variable.
E)$150,000 fixed and $102,500 variablE.Fixed costs remain at $150,000

Question

Quizplus · Accepted Answer

Fixed costs remain constant at $150,000 regardless of production level. Variable costs per unit are $123,000/12,000 = $10.25, so for 10,000 units, variable costs are 10,000 * $10.25 = $102,500.

Based on Predicted Production of 12,000 Units,a Company Anticipates $150,000