Based on predicted production of 22,000 units,a company anticipates $15,000 of fixed costs and $27,500 of variable costs.The flexible budget amounts of fixed and variable costs for 16,000 units are:
A) $10,910 fixed and $20,000 variable.
B) $10,910 fixed and $27,500 variable.
C) $20,000 fixed and $15,000 variable.
D) $15,000 fixed and $20,000 variable.
E) $15,000 fixed and $27,500 variable.

Question

Quizplus · Accepted Answer

Fixed costs remain at $15,000
Variable costs = ($27,500/22,000) x 16,000 units = $20,000

Based on Predicted Production of 22,000 Units,a Company Anticipates $15,000