Campbell, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels.
Campbell had the following budgeted data:
$\begin{array}{llr}
\text { Budgeted variable costs per unit } &\
\text {Direct materials } &\$7.00\
\text {Direct labour } &10.00\
\text { Supplies } &1.00\
\text { Indirect labour } &0.50\
\text { Power } &0.05\
\end{array}$

$\begin{array}{l}
\text { Budgeted fixed overhead for } 2011 \
\text { Supervision } & \$ 4,000 \
\text { Depreciation } & 3,000 \
\text { Rent } & 2000
\end{array}$
-Refer to the figure.What are the total budgeted costs for 5,000 units?
A)$9,000
B)$92,750
C)$101,750
D)$110,000

Question

Campbell, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels.
Campbell had the following budgeted data:
$\begin{array}{llr}
  \text { Budgeted variable costs per unit  } &\
 \text {Direct materials  } &\$7.00\
 \text {Direct labour  } &10.00\
 \text { Supplies } &1.00\
 \text { Indirect labour } &0.50\
 \text { Power } &0.05\
\end{array}$

$\begin{array}{l}
\text { Budgeted fixed overhead for } 2011 \
\text { Supervision } & \$ 4,000 \
\text { Depreciation } & 3,000 \
\text { Rent } & 2000
\end{array}$
-Refer to the figure.What are the total budgeted costs for 5,000 units?
A)$9,000
B)$92,750
C)$101,750
D)$110,000

Quizplus · Accepted Answer

From the given budgeted data, the total variable cost per unit is $15, total fixed costs are $76,000, and the budgeted production is 10,000 units. Using the formula Total Cost = Total Fixed Cost + (Total Variable Cost per unit × Units), we can calculate the budgeted cost for 5,000 units as follows:
Total Cost = $76,000 + ($15 × 5,000)
Total Cost = $101,750
Therefore, the best choice is C.

Campbell, Inc -Refer to the Figure