Wiggins Company's flexible budget for 25,000 units shows $75,000 and $25,000 in variable and fixed costs,respectively.At 35,000 units,the flexible budget would show:

Question

Quizplus · Accepted Answer

To find the flexible budget for 35,000 units, we need to use the high point method.

Variable cost per unit = change in total variable cost / change in activity level
= ($100,000 - $75,000) / (35,000 - 25,000)
= $1 per unit

At 35,000 units, variable costs will be:
= $1 per unit x 35,000 units
= $35,000

Fixed costs remain the same at all levels of production, so they will still be $25,000.

Therefore, the flexible budget for 35,000 units will be:
Variable costs: $35,000
Fixed costs: $25,000
Total: $60,000

The only option that matches this calculation is D, so the answer is D.

Wiggins Company's Flexible Budget for 25,000 Units Shows $75,000 and $25,000