Assume the budget standard for management salaries is $360,000 per year and the preliminary budget assumed 4,000 outputs would be produced. At the end of the year, 4,060 units were produced. The final, restated budget for management salaries:
A) should remain the same as the preliminary budget.
B) should increase by $5,400.
C) should decrease by $5,400.
D) cannot be determined.

Question

Quizplus · Accepted Answer

Management salaries are typically fixed costs and do not vary with the level of output. Therefore, the budget for management salaries should remain the same regardless of the increase in units produced.

Assume the Budget Standard for Management Salaries Is $360,000 Per