Question

The cost accountant for Carlos Candies, Inc. prepared the following static budget based on expected activity of 2,000 units: Revenues $ 64,000 Variable Costs (34,000 ) Contribution Margin 30,000 Fixed Costs (18,000 ) Net Income $ 12,000 If Carlos actually produced 1,500 units, the flexible budget would show variable costs of

Answer 1

$25,500

Step-by-step explanation:

Given that

Unit as per budget = $34,000

Variable cost = 2,000

Produced units = 1,500

The computation of variable cost is shown below:-

Variable cost per units = Unit as per budget ÷ Variable cost

= $34,000 ÷ 2,000

= $17

Variable cost = Variable costs × Produced units

= $17 × 1,500

= $25,500

Therefore computing the variable cost we simply multiply variable cost with produced units.