Question

Based on a predicted level of production and sales of 19,000 units, a company anticipates total variable costs of $58,900, fixed costs of $38,000, and operating income of $34,240. Based on this information, the budgeted amount of variable costs for 17,000 units would be:____.

a. $72,240.
b. $58,900.
c. $52,700.
d. $108,144.
e. $38,000.

Answer 1

Total variable cost= $52,700

Step-by-step explanation:

Giving the following information:

19,000 units:

Total variable costs= $58,900

Fixed costs= $38,000

First, we need to determine the unitary variable cost:

Unitary variable cost= 58,900/19,000

Unitary variable cost= $3.1

Now, the total variable cost for 17,000 units:

Total variable cost= 17,000* 3.1

Total variable cost= $52,700