Jones Company developed the following static budget at the beginning of the company's accounting period:
| Revenue (9,700 units) | $ | 19,400 | |
| Variable costs | 4,850 | ||
| Contribution margin | $ | 14,550 | |
| Fixed costs | 4,850 | ||
| Net income | $ | 9,700 | |
If actual production totals 10,100 units, the flexible budget would show total costs of:
Multiple Choice
$5,050.
$9,900.
$4,950.
None of these is correct.
Variable cost per unit=$4850/9700=$0.5 per unit
Hence Total cost for 10100 units=Variable cost+Fixed cost
=(0.5*10100)+4850
=$9900
NOTE:Total fixed costs and variable cost per unit do not change with change in units
Jones Company developed the following static budget at the beginning of the company's accounting period: Revenue...