Laramie, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. Laramie had the following budgeted data:
What are the total budgeted costs for 5,000 units?
A) $9,000
B) $92,750
C) $101,750
D) $110,000

Question

Laramie, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels. Laramie had the following budgeted data:
 What are the total budgeted costs for 5,000 units?
A) $9,000 
B) $92,750 
C) $101,750 
D) $110,000

Quizplus · Accepted Answer

To find the total budgeted costs for 5,000 units, we need to use the high-level estimate since the company prepares the budget for several different volume levels. Using the high-level estimate, the total budgeted costs would be $20,000 (fixed costs) + $63,000 (variable costs) + $18,750 (semi-variable costs at 5,000 units). Thus, the total budgeted costs for 5,000 units would be $101,750, which is option C.