Based on predicted production of 37,000 units, a company anticipates $925,000 of fixed costs and $841,750 of variable costs. The flexible budget amounts of fixed and variable costs for 35,000 units are (Do not round intermediate calculations):

$875,000 fixed and $841,750 variable.

$796,250 fixed and $925,000 variable.

$925,000 fixed and $796,250 variable.

$925,000 fixed and $841,750 variable.

$875,000 fixed and $796,250 variable.

Question

Business

Vasquez

7 October, 06:17

Based on predicted production of 37,000 units, a company anticipates $925,000 of fixed costs and $841,750 of variable costs. The flexible budget amounts of fixed and variable costs for 35,000 units are (Do not round intermediate calculations):

$875,000 fixed and $841,750 variable.

$796,250 fixed and $925,000 variable.

$925,000 fixed and $796,250 variable.

$925,000 fixed and $841,750 variable.

$875,000 fixed and $796,250 variable.

+4

Answers (1)

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Elliot Barajas · Answer 1

Total variable cost = $796,250

Total fixed costs = $925,000

Explanation:

Giving the following information:

Based on predicted production of 37,000 units, a company anticipates $925,000 of fixed costs and $841,750 of variable costs.

The fixed costs does not vary to production, therefore, they will remain the same in the relevant range.

We need to calculate the unitary variable cost:

Unitary variable cost = 841,750/37,000 = $22.75

Now, we can calculate the total variable cost for 35,000 units

Total variable cost = 22.75*35,000 = $796,250

Total fixed costs = $925,000