Bob and Sons' Static Budget for 10,000 Units of Production

question 121

Multiple Choice

Bob and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $25,000. A flexible budget for 12,000 units of production would show:

• A) the same cost structure in total
• B) direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $30,000
• C) total variable costs of $148,000
• D) direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $25,000

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Definitions:

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