Hurricane Wings Has Budgeted the Following Costs for a Month

question 113

Multiple Choice

Hurricane Wings has budgeted the following costs for a month in which 24,000 wings will be cooked and sold.
$\begin{array}{lr}\text { Wings, breading, and sauce } & \$ 4,900 \\\text { Direct labor (Variable) } & 3,500 \\\text { Rent } & 1,10 0\\\text { Depreciation } & 900\\\text { Other fixed costs }&400\end{array}$
Each wing sells for $0.80 each. What is the budgeted total variable cost?

• A) $8,400
• B) $9,500
• C) $10,400
• D) $10,800

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Definitions:

Long-Term Assets

Assets owned by a company that have a useful life of more than one year, such as property, plant, and equipment.

Current Assets

Current assets are assets that are expected to be converted into cash, sold or consumed within a year or within the normal operating cycle of the business, such as cash, inventory, and receivables.

Installation

refers to the process of setting up and configuring equipment or software to make it ready for use.

Repairs

Expenditures to restore or maintain an asset in its normal operating condition without significantly improving its life or value.