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27 November, 09:44

Jase Manufacturing Co.'s static budget at 7,800 units of production includes $39,000 for direct labor and $2,340 for electric power. Total fixed costs are $39,700. At 10,800 units of production, a flexible budget would show a) variable costs of $41,340 and $39,700 of fixed costs b) variable and fixed costs totaling $81,040 c) variable costs of $57,240 and $54,969 of fixed costs d) variable costs of $57,240 and $39,700 of fixed costs

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  1. 27 November, 09:58
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    d) variable costs of $57,240 and $39,700 of fixed costs

    Explanation:

    Total Cost Cost per unit Total Costs

    7800 unit 10,800

    Direct Labor $39,000 $5 54000

    Electric Power $2340 $ 0.3 3240

    Total $41340 $ 5.3 $57240

    The fixed Costs would not change.

    The variable costs are $ 57240 for 10,800 units and fixed costs are 39,700.

    Option D is the best choice.

    Option A is incorrect. The variable costs are not $ 41,340

    Option B is incorrect. The variable costs and fixed costs do not sum upto $81,040.

    Option C is incorrect. The fixed costs do not change.
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