TrueMasons' budgeted costs for 25,000 linear metres of block are: $\begin{array}{cc}
\text { Fixed manufacturing costs } & \text {$\$ 12,000$ per month } \
\text { Variable manufacturing costs } & \text { $\$ 16.00$ per linear metre } \
\end{array}$
True Masons installed 20,000 linear metres of block during March.How much is budgeted total manufacturing costs in March on TrueMason's flexible budget?

Question

TrueMasons' budgeted costs for 25,000 linear metres of block are: $\begin{array}{cc}
  \text { Fixed manufacturing costs } & \text {$\$ 12,000$ per month } \
 \text { Variable manufacturing costs } & \text { $\$ 16.00$ per linear metre } \
\end{array}$
 True Masons installed 20,000 linear metres of block during March.How much is budgeted total manufacturing costs in March on TrueMason's flexible budget?

Quizplus · Accepted Answer

The flexible budget adjusts for the actual level of activity. For 20,000 linear metres, the variable cost is $20,000 \times 16 = \$320,000$. Adding the fixed cost of \$12,000 gives a total of \$332,000.

TrueMasons' Budgeted Costs for 25,000 Linear Metres of Block Are