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 3,000 units?
A)$3,000
B)$27,000
C)$55,650
D)$64,650

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 3,000 units?
A)$3,000
B)$27,000
C)$55,650
D)$64,650

Quizplus · Accepted Answer

The total budgeted costs for 3,000 units include both variable and fixed costs. Variable costs per unit are $18.55 ($7 + $10 + $1 + $0.50 + $0.05). For 3,000 units, variable costs are $55,650 (3,000 units x $18.55). Fixed costs are $9,000 ($4,000 + $3,000 + $2,000). Total costs are $64,650 ($55,650 + $9,000).

Campbell, Inc -Refer to the Figure