Jase Manufacturing Co.'s static budget at 7,900 units of production includes $39,500 for direct labor and $2,370 for electric power. Total fixed costs are $40,100. At 10,000 units of production, a flexible budget would show a. variable costs of $53,000 and $40,100 of fixed costs b. variable costs of $53,000 and $50,759 of fixed costs c. variable costs of $41,870 and $40,100 d. variable and fixed costs totaling $81,970

Variable costs of $53,000 and $40,100 of fixed costs

Explanation:

Given:

Production unit = 7,900

Direct labour = $39,500

Electric power = $2,370

Total fixed cost = $40,100

Find:

Variable cost and fixed cost at 10,000 units

Computation:

Particular                                                            Amount

Direct labour cost[39,500][10,000/7,900]        $50,000

Electric power [2,370][10,000/7,900]                $3,000

Variable cost                                                        $53,000

Total fixed cost                                                    $40,100

Total cost                                                             $93,100  

reducing the scale of the market for a new product.