A Graph of a Flexible Budget Formula Reflects Fixed Costs

question 13

Multiple Choice

A graph of a flexible budget formula reflects fixed costs of $30,000 per month and total costs of $90,000 at a volume of 6,000 units.Assuming the relevant range is 1,000 to 12,000 units,the graph would reflect total monthly costs at 10,000 units of what dollar amount?

• A)$90,000
• B)$130,000
• C)$100,000
• D)$180,000

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Definitions:

First-In, First-Out

An inventory valuation method where the costs of the earliest goods purchased or produced are the first to be recognized in determining cost of goods sold.

Units Transferred Out

Describes the quantity of goods that have completed the production process and are moved out of the work-in-process inventory into finished goods or to another process.

Units Started

The number of units of a product that have begun the production process within a specific period.

Cost Per Equivalent Unit

This measures the total cost of producing one unit of goods, considering both direct and indirect costs, and is used in processes where goods are indistinguishable from each other.