KirbyCor's budgeted income statement for 2014 follows: $\begin{array}{lr}\text { Sales (80,000 units) }&&\$400,000\
\text { Less: }\
\text { Direct materials } & \$ 120,000 \
\text { Direct labor } & 80,000 \
\text { Variable overhead } & 40,000 \
\text { Fixed costs } & 80,000 &320,000\
\text { Income before taxes }&&\$80,000
\end{array}$ How much would be reported for total variable costs on a flexible budget at 75,000 units?

Question

Quizplus · Accepted Answer

Total variable costs per unit are $3.00 for direct materials, $1.00 for direct labor, and $0.50 for variable overhead. At 75,000 units, total variable costs would be $225,000 (75,000 units x $3.00 + $1.00 + $0.50).

KirbyCor's Budgeted Income Statement for 2014 Follows How Much Would Be Reported for Total Variable Costs on (80,000