Jones Company manufactures an executive chair. The company has budgeted variable costs of $100 for each chair and fixed costs of $7,000 per month. A static budget predicted production and sales of 200 chairs in January, but the company actually produced and sold only 180 chairs at a total cost of $26,000. Jones Company total flexible budget cost for 180 chairs per month is:

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Business

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25 October, 07:25

Jones Company manufactures an executive chair. The company has budgeted variable costs of $100 for each chair and fixed costs of $7,000 per month. A static budget predicted production and sales of 200 chairs in January, but the company actually produced and sold only 180 chairs at a total cost of $26,000. Jones Company total flexible budget cost for 180 chairs per month is:

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Leanna Oliver · Answer 1

Total flexible budget cost=$25,000 per month

Explanation:

The total flexible budget can be expressed as;

Total flexible budget=Total variable cost+Total fixed costs

where;

Total variable cost=Cost per chair*actual number of chairs produced and sold

Total variable cost = (100) * 180=$18,000 per month

Total fixed cost=$7,000 per month

replacing;

Total flexible budget = (18,000+7,000) = $25,000

Total flexible budget cost=$25,000 per month