In September, Larson Inc. sold 40,000 units of its only product for $240,000, and incurred a total cost of $225,000, of which $25,000 was fixed costs. The flexible budget for September showed total sales of $300,000. Among variances of the period were: total variable cost flexible-budget variance, $8,000U; total flexible-budget variance, $63,000U; and, sales volume variance, in terms of contribution margin, $27,000U.

The budgeted fixed cost for September, to the nearest dollar, was:
A) $30,000.
B) $45,000.
C) $71,000.
D) $78,000.
E) $93,000.

Question

In September, Larson Inc. sold 40,000 units of its only product for $240,000, and incurred a total cost of $225,000, of which $25,000 was fixed costs. The flexible budget for September showed total sales of $300,000. Among variances of the period were: total variable cost flexible-budget variance, $8,000U; total flexible-budget variance, $63,000U; and, sales volume variance, in terms of contribution margin, $27,000U.

The budgeted fixed cost for September, to the nearest dollar, was:

The budgeted fixed cost for September, to the nearest dollar, was:
A) $30,000.
B) $45,000.
C) $71,000.
D) $78,000.
E) $93,000.

Quizplus · Accepted Answer

The budgeted fixed cost for September is given as $25,000 in the problem statement, which matches choice A. The other figures provided in the question pertain to variances and other costs, not the budgeted fixed costs.