Jase Manufacturing Co.'s static budget at 7,800 units of production includes $39,000 for direct labor and $2,340 for electric power. Total fixed costs are $39,700. At 10,800 units of production, a flexible budget would show a) variable costs of $41,340 and $39,700 of fixed costs b) variable and fixed costs totaling $81,040 c) variable costs of $57,240 and $54,969 of fixed costs d) variable costs of $57,240 and $39,700 of fixed costs

Question

Business

Cold Brew

11 August, 11:14

Jase Manufacturing Co.'s static budget at 7,800 units of production includes $39,000 for direct labor and $2,340 for electric power. Total fixed costs are $39,700. At 10,800 units of production, a flexible budget would show a) variable costs of $41,340 and $39,700 of fixed costs b) variable and fixed costs totaling $81,040 c) variable costs of $57,240 and $54,969 of fixed costs d) variable costs of $57,240 and $39,700 of fixed costs

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Monserrat Randall · Answer 1

d) variable costs of $57,240 and $39,700 of fixed costs

Explanation:

Total Cost Cost per unit Total Costs

7800 unit 10,800

Direct Labor $39,000 $5 54000

Electric Power $2340 $ 0.3 3240

Total $41340 $ 5.3 $57240

The fixed Costs would not change.

The variable costs are $ 57240 for 10,800 units and fixed costs are 39,700.

Option D is the best choice.

Option A is incorrect. The variable costs are not $ 41,340

Option B is incorrect. The variable costs and fixed costs do not sum upto $81,040.

Option C is incorrect. The fixed costs do not change.