Final answer:
The total rent expense for the flexible budget remains at $900 per month irrespective of the quantity of units because rent expense is a fixed cost that does not vary with production or sales volume.
Step-by-step explanation:
The cost formula for rent expense is typically a fixed monthly amount and does not vary with the quantity of units produced or sold. In the question asked, the cost formula is given as $900 per month. Therefore, regardless of whether the planned quantity is 100 units or the actual quantity is 127 units, the total rent expense for the flexible budget remains $900 per month. In the educational context, it is essential to grasp how fixed costs such as rent expense operate within a budget.
Unlike variable costs, which change in proportion to the level of output or sales, fixed costs remain constant within the relevant range. This concept is vital for students studying business, accounting, or finance. This principle holds true whether you are calculating personal monthly expenses or examining the factors affecting the supply and demand in the housing market. Understanding how fixed and variable costs impact the overall financial picture is a key skill in making informed decisions in both personal and business finance.