1) Fixed overhead costs include ________. A. indirect materials B. energy costs
ID: 2526127 • Letter: 1
Question
1) Fixed overhead costs include ________.
A. indirect materials
B. energy costs
C. the cost of sales commissions
D. leasing of machinery used in a factory
2) The actual information pertains to the month of June. As part of the budgeting process, Colonial Fencing Company developed the following static budget for September. Colonial is in the process of preparing the flexible budget and understanding the results.
The flexible budget for sales revenues will be?
A. $573,500
B. $610,000
C. $558,000
D. $612,000
Sales volume (in units) Sales revenues Variable costs Contribution margin Fixed costs Operating profit Actual Results Flexible Budget Static Budget 15,500 $558,000 300,000 $258,000 236,000 $22,000 17,000 $610,000 $ 256,000 $ $354,000 $ 243,000 $ $111,000 $Explanation / Answer
1 Fixed Overhead Costs Includes: Yes/No Explanation A Indirect Material No Varies as per Production B Energy Costs No Varies as per Production C The Cost of Sales Commission No Varies as per Sales D Leasing Cost Yes Since it is of Fixed Nature 2 Static Budget: Sales Revenue 558000 Sales Volume 15500 Budgeted Sales Revenue PU 36.00 (558000/15500) Actual Units Sold 17000 Flexible Budget: Sales Revenue 612000 (17000*36) Answer is D (612000/-)
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