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 budgeted costs for materials if 5,000 units were produced?
A)$4,000
B)$9,000
C)$35,000
D)$50,000

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 budgeted costs for materials if 5,000 units were produced?
A)$4,000
B)$9,000
C)$35,000
D)$50,000

Quizplus · Accepted Answer

The budgeted cost for materials if 5,000 units were produced is calculated by multiplying the budgeted cost per unit by the number of units. For direct materials, this is $7.00 per unit * 5,000 units = $35,000.

Campbell, Inc -Refer to the Figure