Question

In-Step Manufacturing uses a flexible budget. It has the following budgeted manufacturing costs for 25,000 pairs of shoes: Fixed Manufacturing Costs, $12,000 and Variable Manufacturing Costs, $16.00 per pair of shoes. If In-Step Manufacturing makes 20,000 pairs of shoes this month, what are the total budgeted manufacturing cost for the month?

Answer 1

$ 332,000

Step-by-step explanation:

Given data:

Fixed cost for 25,000 pairs = $ 12,000

Variable manufacturing cost = $ 16.00 / pair of shoes

Number of pairs manufactured = 20,000

Now,

the total variable cost for manufacturing 20,000 shoes = $ 16.00 × 20,000

or

The total variable cost = $ 320,000

also,

the fixed cost remains the same for 20,000 pair of shoes

therefore, the total budgeted cost = Total fixed cost + Total variable cost

or

The total budgeted cost = $ 12,000 + $ 320,000

or

the total budgeted cost = $ 332,000