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5 March, 05:57

Chelsa manufacturing co.'s static budget at 5,000 units of production includes $40,000 for direct labor and $5,000 for variable electric power. total fixed costs are $23,000. at 8,000 units of production, a flexible budget would show

a. variable and fixed costs totaling $107,000

b. variable costs of $64,000, and $28,000 of fixed costs

c. variable costs of $64,000, and $23,000 of fixed costs

d. variable costs of $72,000, and $23,000 of fixed costs

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  1. 5 March, 06:25
    0
    Calculate variable cost per unit

    40000/5000=8 per unit

    And

    5000/5000=1 per unit

    Variable cost per unit=8+1=9 per unit

    So variable cost at 8000 units is

    8,000*9=72,000

    Your answer is

    d. variable costs of $72,000, and $23,000 of fixed costs
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