Nikoto Steel Co. budgeted manufacturing costs for 50,000 tons of steel are: Fixed manufacturing costs $ \quad \quad \$ 50,000 $ per month
Variable manufacturing costs $ \quad \$ 12.00 $ per ton of steel Nikoto produced 40,000 tons of steel during March. How much is the flexible budget for total manufacturing costs for March?

Question

Nikoto Steel Co. budgeted manufacturing costs for 50,000 tons of steel are: Fixed manufacturing costs $ \quad \quad \$ 50,000 $ per month 
Variable manufacturing costs $ \quad \$ 12.00 $ per ton of steel Nikoto produced 40,000 tons of steel during March. How much is the flexible budget for total manufacturing costs for March?

Quizplus · Accepted Answer

The flexible budget for total manufacturing costs includes both fixed and variable costs. Fixed costs remain at $50,000 regardless of production level. Variable costs are $12 per ton, so for 40,000 tons, the variable costs are $480,000 (40,000 tons x $12). Total manufacturing costs = Fixed costs + Variable costs = $50,000 + $480,000 = $530,000.

Nikoto Steel Co $50,000 \quad \quad \$ 50,000 $50,000 Per Month Variable Manufacturing Costs

Nikoto Steel Co $\quad \quad \$ 50,000$ Per Month
Variable Manufacturing Costs