Question

Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of fixed costs for 20,000 units would be:
A. $165,000B. $150,000C. $117,272D. $181,500E. $141,900

Answer 1

Answer:

correct answer is option B

I.E $150,000

Explanation:

GIVEN DETAILS:

Variable cost $99,000

Fixed cost $30,000

Operating income $36,000

Total sales for 22,000 units = Variable cost + Fixed cost + Operating income

total cost  = $99,000 + $30,000 + $36,000 = $165,000

Selling price of per unit = $165,000 / 22,000 = $7.5

Budgeted amount for  20,000 units = $7.5 x 20,000 = $150,000

so correct answer is option B