The static budget for Van Enterprises includes the production of 10,000 units. Van has also budgeted...

The static budget for Van Enterprises includes the production of 10,000 units. Van has also budgeted $50,000 for direct labor, $44,000 for direct materials, utility costs of $5,000, and the plant manager's salary of $15,000. A flexible budget for 12,000 units of production would show:

Group of answer choices

the same cost structure in total

direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and plant manager's salary of $15,000

total variable costs of $136,800

direct labor of $60,000, direct materials of $52,800, utilities of $6,000, and plant manager's salary of $15,000

Solutions

Expert Solution

Calculate following

	Flexible budget
Direct labor	50000/10000*12000 = 60000
Direct material	44000/10000*12000 = 52800
Utilities	5000/10000*12000 = 6000
Plant manager salary	15000

So answer is d) direct labor of $60,000, direct materials of $52,800, utilities of $6,000, and plant manager's salary of $15,000

ekkarill92 answered 2 years ago

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