Young Corporation Has a High Probability of Operating at 40,000

question 5

Multiple Choice

Young Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours. The company's flexible budget revealed the following: $$\begin{array} { l c c c } & \underline { 30,000 \text { Hours } } & \underline { 40,000 \text { Hours } } & \underline { 50,000 \text { Hours } } \\\text { Variable costs } & \$ 135,000 & \$ 180,000 & \$ 225,000 \\\text { Fixed costs } & 720,000 & 720,000 & 720,000\end{array}$$ If Young operated at 35,000 hours, its total budgeted cost would be:

• A) $877,500.
• B) $945,000.
• C) $787,500.
• D) $997,500.
• E) $810,000.