Waterway Industriesbudgeted manufacturing costs for 70000 tons of steel are: Fixed manufacturing costs $50000 per month Variable manufacturing costs $12 per ton of steel Waterwayproduced 55000 tons of steel during March. How much is the flexible budget for total manufacturing costs for March?

A. $890000

B. $695000

C. $660000

D. $710000

Option (D) is correct.

Explanation:

Flexible budget for 55,000 tons:

Total Manufacturing costs for 55,000 tons:

= Fixed manufacturing costs + Variable manufacturing costs

= Fixed manufacturing costs + (Tons of steel produced during march * Variable manufacturing costs per ton of steel)

= $50,000 + (55,000 tons of steel * $12 per ton)

= $50,000 + $660,000

= $710,000

Note:

Period costs constant irrespective of tons produced.