Question

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?

Answer 1

Answer:

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