Marigold Corp. budgeted manufacturing costs for 70000 tons of steel are: Fixed manufacturing costs $50000 per month Variable manufacturing costs $12 per ton of steel Marigoldproduced 40000 tons of steel during March. How much is the flexible budget for total manufacturing costs for March

Computation of the flexible budget for total manufacturing costs for March:

Flexible budget for total manufacturing costs for March = (Production of steel during March * Variable Manufacturing Costs per ton of steel) + Fixed Manufacturing Costs Per month.

Flexible budget for total manufacturing costs for March = (40,000 ton * $12 per ton) + $50,000

Flexible budget for total manufacturing costs for March = $480,000 + $50,000

Flexible budget for total manufacturing costs for March = $530,000

Answer is $530,000

Answer: $290,000

Explanation:

Flexible budget for 20,000 tons:

Fixed manufacturing costs (Period costs constant irrespective of tons produced) $50,000

Variable manufacturing costs

($12 * 20,000) $240,000

Total Manufacturing costs for 20,000 tons will be:

$50,000 + $240000 = $290,000

Note: Variable costs varies based on the number of units produced whereas Fixed costs are the period costs that are constant irrespective of units produced.