Question

Jase Manufacturing Co.'s static budget at 7,800 units of production includes $39,000 for direct labor and $3,120 for electric power. Total fixed costs are $43,900. At 10,500 units of production, a flexible budget would show a.variable costs of $56,700 and $43,900 of fixed costs b.variable costs of $56,700 and $59,096 of fixed costs c.variable and fixed costs totaling $86,020 d.variable costs of $42,120 and $43,900

Answer 1

Option A. Variable costs of $56,700 and $43,900 of fixed costs

Step-by-step explanation:

Given:

Jase Manufacturing Co.'s static budget at 7,800 units of production includes;

Direct labor = $39,000

Electric power = $3,120

Total fixed costs= $43,900

Variable costs = [$(39,000 + 3,120) ÷ 7800] × 10,500= $56,700

Fixed costs = $43,900