Hurricane Wings Has Budgeted the Following Costs for a Month

question 68

Multiple Choice

Hurricane Wings has budgeted the following costs for a month in which 24,000 wings will be cooked and sold. $$\begin{array}{l}\text { Wings, breading, and }\\\begin{array} { l r } \text { sauce } & \$ 4,900 \\\text { Direct labor (Variable) } & 3,500 \\\text { Rent } & 1,100 \\\text { Depreciation } & 900 \\\text { Other fixed costs } & 400\end{array}\end{array}$$ Each wing sells for $0.80 each.What is the budgeted fixed cost per unit?

• A)$0.35
• B)$0.80
• C)$0.10
• D)$0.17

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Definitions:

Service Potential

The capacity or capability of an asset, especially a non-financial asset, to provide services or benefits over its useful life.

Capitalization of Interest

The process of adding accumulated interest to the principal balance of a loan, which then earns further interest.

Construction

The process or art of building structures, such as buildings, bridges, or roads.

Actual Borrowings

Actual borrowings refer to the actual amount of funds a company or individual has borrowed from lenders or financial institutions, as opposed to planned or potential borrowing amounts.