Johansson Company developed the following static budget at the beginning of the

Question

Johansson Company developed the following static budget at the beginning of the company's accounting period:

Revenue (10,000 units) $20,000
Variable costs 5,000

--------------------------------------------------------------------------------

Contribution margin $15,000
Fixed costs 5,000

--------------------------------------------------------------------------------

Net income $ 10,000

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


If actual production totals 10,400 units, the flexible budget would show variable costs of (Do not round your intermediate calculations.):
$5,000.
$20,400.
$5,100.
$5,200.

Explanation / Answer

Variable cost is considered 25% of revenue Hence in case of 10400*2=20800 20800*25/100=$5200

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.