Question

Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be

Answer 1

Fixed Cost = $10,000

Variable Costs = $90,000

Step-by-step explanation:

Variable Cost per unit = $72,000 ÷ 12,000

= $6

Variable Costs at 15,000 units = $6 x 15,000

= $90,000

Fixed Cost (given) = $10,000