Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Operating Expenses Variable Operating Costs $.75 per unit sold Fixed Operating Costs $475,000 Other Info: Units produced in 2016 42,000 Units sold in 2016 40,500 Whistle Works sells each whistle for $12. It's been determined that each unit costs $7.25 to manufacture. How much is total budgeted operating expenses for the year ended 2016?

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Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Operating Expenses Variable Operating Costs $.75 per unit sold Fixed Operating Costs $475,000 Other Info: Units produced in 2016 42,000 Units sold in 2016 40,500 Whistle Works sells each whistle for $12. It's been determined that each unit costs $7.25 to manufacture. How much is total budgeted operating expenses for the year ended 2016?

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Tinkerbell · Answer 1

Budgeted Operating expense = $505,375

Explanation:

Giving the following information:

Operating Expenses Variable Operating Costs $.75 per unit sold

Fixed Operating Costs $475,000

Other Info: Units sold in 2016 40,500

To determine the budgeted operating expense, we need to use the following formula:

Operating expense = total fixed operating expense + total variable operating expense

Operating expense = 475,000 + 0.75*40,500 = $505,375