Question

Based on predicted production of 37,000 units, a company anticipates $925,000 of fixed costs and $841,750 of variable costs. The flexible budget amounts of fixed and variable costs for 35,000 units are (Do not round intermediate calculations):

$875,000 fixed and $841,750 variable.

$796,250 fixed and $925,000 variable.

$925,000 fixed and $796,250 variable.

$925,000 fixed and $841,750 variable.

$875,000 fixed and $796,250 variable.

Answer 1

Total variable cost= $796,250

Total fixed costs= $925,000

Step-by-step explanation:

Giving the following information:

Based on predicted production of 37,000 units, a company anticipates $925,000 of fixed costs and $841,750 of variable costs.

The fixed costs does not vary to production, therefore, they will remain the same in the relevant range.

We need to calculate the unitary variable cost:

Unitary variable cost= 841,750/37,000= $22.75

Now, we can calculate the total variable cost for 35,000 units

Total variable cost= 22.75*35,000= $796,250

Total fixed costs= $925,000