Use the following information for the next 3 questions.
ATR Corporation's budgeted product costs for the third quarter of 20x2 were based on an expected volume of 1,500 units. The budgeted unit costs appear below:
-If ATR's actual volume for the third quarter of 20x2 was 15% above its expected volume I. Actual total costs will be 15% greater than budgeted total costs
II. Actual cost per unit will be 15% greater than budgeted cost per unit
A) I
B) II
C) I and II
D) None of the above (neither I nor I

Question

Use the following information for the next 3 questions.
ATR Corporation's budgeted product costs for the third quarter of 20x2 were based on an expected volume of 1,500 units. The budgeted unit costs appear below: 
-If ATR's actual volume for the third quarter of 20x2 was 15% above its expected volume I. Actual total costs will be 15% greater than budgeted total costs
II. Actual cost per unit will be 15% greater than budgeted cost per unit
A) I 
B) II 
C) I and II 
D) None of the above (neither I nor I

Quizplus · Accepted Answer

Actual total costs and cost per unit will not necessarily increase by 15% because fixed costs remain constant regardless of volume changes, and variable costs per unit remain the same.

Use the Following Information for the Next 3 Questions