Processing Costs in the Billing Department of Alfaro Company Are

Processing costs in the billing department of Alfaro Company are a mixture of variable and fixed components. Records indicate that average unit processing costs are $0.50 per account processed at an activity level of 32,000 accounts. When only 22,000 accounts are processed, the total cost of processing is $12,500. Given these data, at a budgeted level of 25,000 accounts:

A) Processing costs are expected to total $8,750
B) Fixed processing costs are expected to be $10,400
C) The variable processing costs are expected to be $0.35 per account processed
D) Processing costs are expected to total $13,000