Butler Company Developed a Static Budget at the Beginning of the Company's

question 36

Multiple Choice

Butler Company developed a static budget at the beginning of the company's accounting period based on an expected volume of 4,000 units: $$\begin{array}{l}\begin{array} {ll } & \text {pre unit }\\\hline\text { Revenue}&\$4.00\\\text {Variable costs }&1.50\\\text {Contribution margin }&\$2.50\\\text {Fixed costs }&2.00\\\text {Net income }&\$0.50\end{array}\end{array}$$ If actual production totals 5,000 units, the flexible budget would show fixed costs of:

• A) $10,000.
• B) $2 per unit.
• C) $8,000.
• D) None of these.

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Definitions:

Prototypical

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Mental Representation

The mental imagery or symbolic representation of objects, events, or ideas in the mind, which are not currently being perceived or sensed.

Prototypes

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