Emerald, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. $\begin{array}{ll}
\text { Emerald has the following budgeted data } \
\text { Budgeted variable costs per unit: } & \
\text { Direct materials } & \$ 5.00 \
\text { Direct labor } & 8.00 \
\text { Supplies } & 2.00 \
\text { Indirect labor } & 1.50 \
\text { Power } & 0.02\\
\text { Budgeted fixed overhead for the current year: }\
\text { Supervision } & \$ 2,000 \
\text { Depreciation } & 5,000 \
\text { Rent } & 5,000
\end{array}$ What are the total budgeted costs for 4,000 units?
A)$56,250
B)$48,960
C)$78,080
D)$97,106

Question

Quizplus · Accepted Answer

Total budgeted costs = (Variable costs per unit * Number of units) + Total fixed costs. Variable costs per unit = $5 + $8 + $2 + $1.5 + $0.02 = $16.52. For 4,000 units, variable costs = $16.52 * 4,000 = $66,080. Total fixed costs = $2,000 + $5,000 + $5,000 = $12,000. Therefore, total budgeted costs = $66,080 + $12,000 = $78,080.

Emerald, Inc What Are the Total Budgeted Costs for 4,000 Units? A)$56,250

Emerald, Inc What Are the Total Budgeted Costs for 4,000 Units?
A)$56,250