Question

Palante actually produced 8,000 units. The controller decided to compare their actual results to their budget. The following budget information is available: Expected Costs and Selling Price Based on 5,000 units: Variable manufacturing costs per unit $50 Fixed manufacturing costs per unit $20 Selling price per unit $80 Expected production level 5,000 units In the flexible budget, what is the total manufacturing cost? Group of answer choices $560,000 $80,000 $400,000 $500,000 $350,000

Answer 1

$500,000

Step-by-step explanation:

The computation of total manufacturing cost is shown below:-

Flexible Budget Manufacturing Cost = Variable cost of Manufacturing at actual units + Estimated Fixed Manufacturing Costs at the budgeted Units

= (8,000 Units × $50 per unit) + (5,000 Units × $20 per unit)

= 400,000 + 100,000

= $500,000

So, for computing the Flexible Budget Manufacturing Cost we simply applied the above formula.