Answer the following questions using the information below:
JJ Abrams planned to use $164 of material per unit but actually used $160 of material per unit, and planned to make 1,200 units but actually made 1,000 units.
-Bebee Corporation currently produces cardboard boxes in an automated process. Expected production per month is 40,000 units, direct-material costs are $0.60 per unit, and manufacturing overhead costs are $18,000 per month. Manufacturing overhead is all fixed costs. What is the flexible budget for 20,000 and 40,000 units, respectively?
A)$21,000; $33,000
B)$21,000; $42,000
C)$30,000; $42,000
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

Flexible budget = fixed costs + (variable cost per unit x number of units)
Variable cost per unit = direct-material costs = $0.60
Fixed costs = manufacturing overhead costs = $18,000

For 20,000 units:
Flexible budget = $18,000 + ($0.60 x 20,000) = $30,000

For 40,000 units:
Flexible budget = $18,000 + ($0.60 x 40,000) = $42,000

Therefore, the answer is C, $30,000 for 20,000 units and $42,000 for 40,000 units.

Answer the Following Questions Using the Information Below