Question

Based on a predicted level of production and sales of 16,000 units, a company anticipates total variable costs of $62,400, fixed costs of $25,600, and income of $32,400. based on this information, the budgeted amount of variable costs for 13,000 units would be:

Answer 1

To find the variable costs for 13,000 units, we first calculate the variable cost per unit ($3.90) by dividing the total variable costs for 16,000 units ($62,400) by the number of units (16,000). Then we multiply the cost per unit by the desired number of units (13,000), resulting in budgeted variable costs of $50,700.

Step-by-step explanation:

The student question focuses on finding the budgeted variable costs for a production of 13,000 units given the initial data for 16,000 units of production.

To find the variable cost per unit, we divide the total variable costs by the number of units. Here, the variable cost per unit is $62,400 divided by 16,000 units, resulting in $3.90 per unit.

To calculate the variable costs for 13,000 units, we multiply $3.90 by 13,000, which yields $50,700. Therefore, the budgeted variable costs for producing 13,000 units is $50,700.